Musk reportedly tells X staff 'we're barely breaking even' as the big banks start getting antsy over their debt
Tech billionaire Elon Musk has been a public figure for decades, but has enjoyed an outsized profile in recent years, not a little of which is down to his decision to acquire Twitter for $44 billion in 2022. In the end, that deal was almost forced on Musk after the courts got involved, but you wouldn't know it from the way the trollish memester launched into his new role with various galaxy-brained schemes that mostly seem to have made Twitter worse: Including, of course, renaming it X.
A new report by the Wall Street Journal claims that some of the banks that helped Musk finance the deal are now getting a little antsy about their investment (some $13 billion of the total) and are looking into how they claw it back. Institutions including Bank of America, Barclays, and Morgan Stanley have been holding onto the debt, hoping for more favourable economic headwinds, and are now hoping to per the WSJ «sell senior debt at 90-95 cents on the dollar, while retaining more-junior holdings.»
The waters will apparently be tested next week with a $3 billion package of debt, which follows a sale of $1 billion in debt to private investors. The problem for the banks is that it's widely believed Musk overpaid for the company, and its subsequent underperformance has only confirmed this in the eyes of many. The only real counter to this is Musk's new political position as some sort of right-hand man to President Donald Trump which, some investors believe, could augur well for the future X.
That may prove wildly optimistic (other investors are reportedly braced to take haircuts of around 75%), because few of Musk's grandiose pronouncements about Twitter/X have come to pass. The interest payments alone on Musk's deal amount to $1 billion a year, while new additions such as job listings and a dedicated video tab seem unlikely to make any dramatic change to the bottom line. At one stage Musk said X would become «the everything app», which users could basically live their lives through:
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