August 21, 2024 10:48:00
Elon Musk, who acquired Twitter (now X) in October 2022, raised $44 billion (about 6.4 trillion yen) for the acquisition, of which $13 billion (about 1.9 trillion yen) was borrowed from major US banks such as Morgan Stanley and Bank of America. However, the Wall Street Journal reported that this transaction was the worst acquisition financing transaction for banks since the 2008-2009 financial crisis.
Elon Musk’s Twitter Purchase Would Be Worst Banking Acquisition Since the Financial Crisis – WSJ
https://www.wsj.com/tech/elon-musks-twitter-takeover-is-now-the-worst-buyout-for-banks-since-the-financial-crisis-3f4272cb
Banks that loaned Musk $13 billion to buy Twitter may be regretting it | TechCrunch
https://techcrunch.com/2024/08/20/the-banks-that-loaned-musk-13b-to-buy-twitter-might-be-having-regrets/
Musk acquired Twitter in October 2022 “to protect freedom of speech.” The acquisition price was reported to be $44 billion, and he raised $13 billion from investors as well as major American banks.
Elon Musk raises 6 trillion yen to acquire Twitter, declares that “if the acquisition is successful, we will eliminate spam bots” – GIGAZINE
When banks lend money to fund an acquisition, they typically earn a transaction fee by selling the loaned funds to another company. However, Company X’s poor financial health meant they were unable to sell the loan, resulting in a massive hung deal, The Wall Street Journal reported.
The Wall Street Journal points out that the reason the banks lent Company X $13 billion for the acquisition was because “the fact that the banks were lending to the richest man in the world was too attractive. But the deal would have been a big mistake if Company X had not been able to draw down the interest payments at the time of writing, or the principal repayment at the maturity of the loan.
Since buying Twitter, Musk has sold $3.6 billion worth of Tesla stock to cover the company’s losses.
Elon Musk sells Tesla shares worth about 495 billion yen to cover Twitter losses, the fourth time since announcing the Twitter acquisition – GIGAZINE
X’s valuation has also reportedly fallen to $15 billion, just a third of the $44 billion Musk paid for the acquisition.
Twitter’s value falls to one-third of what Elon Musk bought it for – GIGAZINE