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- Wall Street helped Elon Musk buy Twitter last year by loaning him $13 billion.
- The banks are now preparing to unload the debt, and expect to take a 15% hit, per the WSJ.
- The biggest lenders like Morgan Stanley and Bank of America would lose hundreds of millions of dollars.
The banks which helped Elon Musk take over Twitter are expecting to lose $2 billion on the loans they gave him, according to The Wall Street Journal.
When the world’s richest person agreed to buy the social media company for $44 billion last October, $13 billion was loaned by the likes of Morgan Stanley, Bank of America, and Barclays. The loans are backed by some of Musk’s Tesla stock.
In the year Musk has owned the platform, X — as Twitter is now called — has faced a number of struggles.
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According to The Wall Street Journal, Musk’s lenders have started preparing to unload the debt.
Bankers close to the deal told The Journal that X could be given a junk-bond rating, meaning it is at risk of defaulting on the loans, due to both Musk’s controversial management style and a waning ad market.
People familiar with the matter told the newspaper that the banks are expecting to take a hit of 15%, or $2 billion in total.
For the banks which hold the largest pieces, like Morgan Stanley and BofA, that would mean hundreds of millions in losses, according to the Journal.
https://finance.yahoo.com/news/banks-loaned-elon-musk-money-115005663.html
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