Bankers Have Lost So Much Money Thanks to Elon’s Terrible Twitter Deal

Everyone knew Elon Musk was overpaying for Twitter erstwhile he bought the societal media level backmost successful 2022. That’s precisely wherefore the billionaire tried to back retired of the deal earlier being forced to finalize the acquisition aft a tribunal order. But we’re present learning much details astir conscionable however dumb buying Twitter was successful fiscal terms, according to a study from the Wall Street Journal Tuesday. Apparently, it was the worst woody since the planetary fiscal situation successful 2008.

Seven banks loaned Elon Musk wealth totaling $13 cardinal successful 2022 to assistance him bargain Twitter, present known by the obnoxiously generic sanction X, and each azygous 1 has been incapable to offload the indebtedness without incurring “major losses” from the deal, according to the Wall Street Journal. This means the loans are conscionable sitting connected the equilibrium sheets of these banks. In fact, the Journal explains that this wasn’t conscionable 1 of the worst deals since 2008, it’s 1 of the worst deals of each time.

Musk and different investors brought astir $30 cardinal successful currency to the table, portion the banks supplied the different $13 cardinal to finalize the purchase. But we present cognize the radical who enactment astatine those banks person felt sizeable fiscal symptom from agreeing to thing truthful stupid. How overmuch pain? As the Journal tells it, apical concern bankers astatine Barclays were told astatine a meal successful precocious 2023 that everyone would beryllium getting astatine slightest a 40% wage cut. After everyone got their bonuses for the year, astir 50 of the company’s 200 directors left, according to the Journal.

Every slope successful the deal, including Morgan Stanley, Bank of America, Barclays, Mitsubishi UFJ Financial Group, BNP Paribas, Mizuho, and Société Générale, person been struggling with this hanging connected their books. And talks astir restructuring the woody haven’t been fruitful, according to the Journal. As countless journalists astatine places similar Bloomberg person antecedently pointed out, those aforesaid banks privation to person entree to thing Musk whitethorn beryllium cooking up successful the future, including a imaginable IPO of SpaceX, arguably the smartest happening the billionaire ever founded. SpaceX is simply a powerhouse successful commercialized abstraction and benefits tremendously from authorities contracts. Starlink, the outer net limb of SpaceX, whitethorn adjacent beryllium spun disconnected and could spot its ain IPO successful the future. And the hype astir each of that puts these banks successful a tricky presumption arsenic Musk continues to wounded their fiscal positions with his dumb Twitter purchase.

X is presently valued astatine astir $19 billion, little than fractional what Musk paid for it. And yet Musk has maintained a estimation among immoderate of the dumbest radical that he’s inactive a genius. The tech oligarch remains surrounded by a bubble of sycophants connected X perpetually telling him what an astonishing idiosyncratic helium is. The full spectacle is apt a objection of the superior crushed helium bought the site. Musk bought himself a harmless abstraction wherever everyone is perpetually telling him he’s a genius. And that’s worthy a batch of wealth to 1 of the wealthiest men successful the world.