this post was submitted on 20 Aug 2024
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Nearly two years after Elon Musk’s acquisition, X’s business is still struggling to climb out of the deep hole it fell into under his ownership.

The $13 billion that Elon Musk borrowed to buy Twitter has turned into the worst merger-finance deal for banks since the 2008-09 financial crisis.

The seven banks involved in the deal, including Morgan Stanley and Bank of America, lent the money to the billionaire’s holding company to take the social-media platform, now named X, private in October 2022. Banks that provide loans for takeovers generally sell the debt quickly to other investors to get it off their balance sheets, making money on fees.

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[–] Zaktor@sopuli.xyz 167 points 3 months ago (1 children)

The losses on banks’ balance sheets from the deal are also biting into potential bonuses for some bankers, the report said.

They should just be fired. This wasn't a deal that looked like it had good potential but didn't pan out. It was obviously a bad buy right from the start and the guy who was going to run the private enterprise was both spread too thin to run it well, was increasingly erratic in his behavior, and wasn't any good at the business he was taking over. Everyone knew it was a bad deal at the time.

[–] Pelicanen@sopuli.xyz 30 points 3 months ago

Yes, but have you considered: Tesla line go up. Elon CEO. When Elon CEO, Twitter line go up. Logic.

[–] cheese_greater@lemmy.world 134 points 3 months ago (1 children)

Good fuck em. As if they totally havent made back any loss in recent years

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[–] homesweethomeMrL@lemmy.world 127 points 3 months ago (2 children)

At the time, Musk himself had complained that the price for Twitter was too high, but he decided to go ahead with the deal after waffling over it for a while.

Mmmmmmmmm that’s not how I’d describe it, Marketwatch.

[–] bradorsomething@ttrpg.network 51 points 3 months ago (1 children)

I mean, he did have to decide if he wanted to pay the money and take the company, or just pay the money, as he’d signed a solid agreement. So there was a choice.

[–] Voroxpete@sh.itjust.works 34 points 3 months ago* (last edited 3 months ago)

In retrospect, paying the money and not taking the company might actually have been the more sound financial decision.

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[–] jewbacca117@lemmy.world 108 points 3 months ago (1 children)

Guess the saying is true, if you owe the bank $1000, that's your problem. If you owe the bank $13 billion, its the bank's problem.

[–] ryan213@lemmy.ca 38 points 3 months ago (2 children)

Hmm... How do I get them to lend me $13B??

[–] jewbacca117@lemmy.world 45 points 3 months ago (4 children)
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[–] bradorsomething@ttrpg.network 22 points 3 months ago (1 children)

The key is to have $60 billion.

[–] JustEnoughDucks@feddit.nl 9 points 3 months ago

The key is to become famous and create hype around your gambling bet so other people artificially inflate the value so that you have a "theoretical" $60 billion.

[–] HootinNHollerin@lemmy.world 79 points 3 months ago* (last edited 3 months ago) (8 children)
[–] Mikelius@lemmy.world 78 points 3 months ago (5 children)

We were due for our yearly billionaire offering to Poseidon.

[–] Osito@lemmy.world 21 points 3 months ago (2 children)

May the god of water take mercy on us with this wealthy sacrifice and place a harvest in our nets

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[–] Diplomjodler3@lemmy.world 15 points 3 months ago

I don't think one is enough to placate Poseidon.

[–] vaultdweller013@sh.itjust.works 8 points 3 months ago (6 children)

Either that or Jörmungandr has aquired a taste for richness. As a man who likes cheesecake I can respect it.

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[–] Icalasari@fedia.io 26 points 3 months ago

I like this new tradition

[–] b161@lemmy.blahaj.zone 19 points 3 months ago
[–] ShaggySnacks@lemmy.myserv.one 13 points 3 months ago (1 children)

Sounds like sacrificed a few billionaires this time.

I hope our watery god is satisfied, if not. I guess we have sacrifice a few more billionaires.

[–] Maggoty@lemmy.world 14 points 3 months ago* (last edited 3 months ago) (3 children)

I think we should advertise small boat sailing to Elon, combined with the beauty of the Gibraltar strait area and the manliness of doing it alone.

We can give Poseidon a break and let the orcas have one.

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[–] phoneymouse@lemmy.world 11 points 3 months ago (1 children)
[–] HootinNHollerin@lemmy.world 12 points 3 months ago* (last edited 3 months ago)

Ah yea you’re right. Chairman but what’s the difference

[–] GunValkyrie@lemmy.world 8 points 3 months ago (2 children)

Sounds like he found out what's behind the implications.

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[–] confused_code_monkey@lemm.ee 66 points 3 months ago (2 children)

"since the financial crisis" - You'll have to be more specific than that 🥲

[–] tiredofsametab@fedia.io 34 points 3 months ago (1 children)

Circa 1177 BCE. Sea Peoples ruin everything.

[–] FlyingSquid@lemmy.world 8 points 3 months ago (2 children)

Now now... I agree that the Peleset are all awful, but what have the Weshesh ever done to you?

[–] bad_alloc@lemmy.dbzer0.com 13 points 3 months ago

Burning olive oil can't melt copper bars! The attack on the twin ziggurats was an inside job masterminded by the King of Uruk, Gilga W Mesh!

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[–] some_guy@lemmy.sdf.org 65 points 3 months ago

Bank of America and Morgan Stanley commanded the top two spots in the U.S. leveraged-finance investment banking league tables in 2021 and 2022 during some quarters before Musk bought Twitter, according to data from Dealogic. In 2023 and 2024, JPMorgan and Goldman Sachs—which didn’t finance the Twitter deal—have held the top spots.

He's so toxic that being involved with him can unseat you from being the top two in your industry. This will make people a bit more hesitant to get into bed with him (gross) in the future.

Barclays’s top investment bankers on the mergers and acquisitions team were told at a New York dinner early last year that compensation for everyone in the room would be cut by at least 40% from the prior year. The bank had several hung deals hurting its performance but X was by far the largest, according to people familiar with the situation.

When you're slashing compensation for your people, especially the ones who bring in real money, you know it's serious. I'm happy to see X crash and burn and pull down bankers with it. Dumbass mf.

[–] blindbunny@lemmy.ml 56 points 3 months ago

No single human should have this much control over our economy.

[–] yamanii@lemmy.world 42 points 3 months ago (3 children)

Sounds like a they problem.

[–] zbyte64@awful.systems 13 points 3 months ago

A problem partially funded by my mortgage 🙃

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[–] WoahWoah@lemmy.world 42 points 3 months ago (10 children)

Isn't the difference here that Musk has a tremendous amount of assets in the form of Tesla stock that can be used to repay the debt? It's not like he can declare bankruptcy and stiff them on the bill.

[–] Stopthatgirl7@lemmy.world 28 points 3 months ago (7 children)

The thing is, selling off the amount of Tesla stock that he’d need to to pay off the debt would cause Tesla stock to plummet, leaving him significantly less wealthy and putting Tesla in danger. So even though he technically has the money to pay them, he functionally doesn’t.

[–] WoahWoah@lemmy.world 39 points 3 months ago* (last edited 3 months ago) (2 children)

He both technically and functionally does have the ability to repay them, which he will find out soon if he doesn't restructure the debt, and implying this is in anyway similar to the financial crisis is absurd clickbait.

It could possibly tank Tesla and make Elon less rich if he had to pay his debt. Oh no. As if Tesla being valued at more than 9 major other automakers combined isn't outlandish in the first place.

But won't someone please think of the oligarch and his shareholders! 🙄

[–] Dkarma@lemmy.world 9 points 3 months ago

This is so spot on.

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[–] nondescripthandle@lemmy.dbzer0.com 13 points 3 months ago* (last edited 3 months ago) (10 children)

No debt holder is obliged to consider the reprecussions of collecting their debt, just look at house foreclosure. The wellbeing of a thrid party company has no bearing on the ability to pay back a debt, and there are stock sell off plans that facilitate large liquidation over a period of time to ameliorate the stock price drop and prevent it from a full crash. Anyone who tells you otherwise is simply licking billionaire boots.

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[–] Cethin@lemmy.zip 12 points 3 months ago (3 children)

My understanding is the money he used to pay for Twitter was from loans by banks, where they got mostly Tesla stock as collateral. Musk can pay back the loan to get the stock back, or the banks can sell it. This is done because loans aren't taxed, but selling the stock would be. Now the banks are stuck with stocks that are worth less than the loans they gave out, so they are at a loss.

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[–] reddig33@lemmy.world 26 points 3 months ago
[–] LEDZeppelin@lemmy.world 20 points 3 months ago (1 children)

I can see a very real scenario where Drump gets elected, appoints Moron Musk as treasury secretary, and magically wipes off his Xitter debt never to be heard again

[–] Voroxpete@sh.itjust.works 8 points 3 months ago

I'd say he can't do that (the debt part) but apparently the US supreme court thinks a president can do whatever the fuck they want, so who knows at this point.

[–] nutsack@lemmy.world 18 points 3 months ago (1 children)

okay but he blames advertisers for ruining the company

[–] Stopthatgirl7@lemmy.world 29 points 3 months ago

Narcissists will never blame themselves for their screw ups.

[–] AshMan85@lemmy.world 15 points 3 months ago

that is awesome

[–] 9point6@lemmy.world 15 points 3 months ago (1 children)

OP did you forget to link the article?

[–] Stopthatgirl7@lemmy.world 14 points 3 months ago (1 children)

Huh, that’s strange. Let me put it up now; thanks!

[–] 9point6@lemmy.world 17 points 3 months ago* (last edited 3 months ago)

Cheers!

Needed to unpaywall it, so here's an archive link for anyone who needs the same: https://archive.is/hokvj

Edit: hmm there isn't actually much more there

[–] NutWrench@lemmy.ml 14 points 3 months ago (1 children)

Morgan Stanley and BOA will find ever bigger suckers to sell those loans to once they've had a chance to repackage them.

It is long past time we got over our child-like worship of billionaires.

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[–] marx2k@lemmy.world 13 points 3 months ago

This is why I stick with credit unions.

[–] Spitzspot@lemmings.world 8 points 3 months ago

This makes me happy.

[–] some_guy@lemmy.sdf.org 8 points 3 months ago
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