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The loan used by billionaire Elon Musk to buy social media platform Twitter, which Musk has since renamed “X” and reportedly valued at between $4 billion and $20 billion, was the bank’s worst merger financing deal since the 2008 financial crisis.
Seven banks were involved in Elon Musk’s $44 billion acquisition of Twitter in October 2022, including Bank of America, Morgan Stanley, Barclays, BNP Paribas, Mizuho Bank, Societe Generale and Mitsubishi UFJ Financial Group.
“The loan has been outstanding longer than any similar unsold transaction since the 2008-09 financial crisis for which research firms have complete records,” according to a Wall Street Journal report on the financials of Musk’s Twitter acquisition.
“The Wall Street Journal reports that banks have been unable to sell the debt without taking big losses, due in large part to the companies’ poor financial health, meaning the loans remain ‘stuck’ on banks’ balance sheets.”
“Although lending volume has declined since Musk’s $44 billion acquisition of Twitter Inc. (now renamed X), deals are now in ‘historic territory’ in terms of poor performance.” [via The Daily Beast]
As of August 2024, less than two years after Musk acquired Twitter, the social media platform is reportedly worth between $15 billion and $20 billion, roughly half of what Musk paid for it.
Musk’s run at Twitter has been marred by heady, value-destroying decisions, including the rebranding to X, the scrapping of the blue check system (which negated the service’s main value proposition: fast, instantly verifiable news), and the rise of hate speech, bot use, and spam (especially related to adult movies).
This summer, Musk and Twitter also filed an antitrust lawsuit against the Global Coalition for Responsible Media, accusing the two companies of conspiring to “withhold billions of dollars of advertising from Twitter.” However, during a conference earlier this year, Musk told advertisers who didn’t want to advertise on Twitter to “fuck you.”