Elon Musk’s broken promises leave lenders at a loss
Elon Musk reportedly told lenders they would not lose out on the $ 13 billion lending agreement to buy Twitter/X.
As reported in the Financial Times, Musk is said to have made the assurances in private to lenders from Morgan Stanley, Bank of America, Barclays, MUFG, BNP Paribas, Mizuho and Société Générale.
X deal to cost major banks millions
Banks who funded the deal stand to lose hundreds of millions from the agreement.
In the Financial Times article — — it is speculated that Wall Street investors interested in “selling the $12.5bn of bonds and loans below 60 cents on the dollar — a price many investors believe the banks would be lucky to achieve in the current market — would imply losses before accounting for X’s interest payments of $4bn or more, writedowns that the syndicate of lenders has not publicly reported.”
Musk has repeatedly alienated advertisers due to posts on the social media platform, which resulted in a major apology from the billionaire and business decisions that have seen the stock market price of Twitter/X plummet.
Musk notably changed the 17-year-staple of bluebird branding for Twitter. A signal many associated with the platform and its established perch at the top of the social media tree.
X in turmoil across 2023
It has been a turbulent 2023 for the company, with formal apologies, lawsuits, and a raft of advertisers withdrawing from the platform due to Musk’s decisions.
In November, market insights company Sensor Report discovered that “notable brands such as Apple, IBM, Disney, and Sony have pulled their advertising on X in the wake of recent controversial comments made by Elon Musk in addition to the discovery that their advertisements were apparently placed alongside flagrant, offensive content.”
A former Twitter executive sued Elon Musk this month after being fired for objecting to budget cuts that would damage Federal Trade Commission (FTC) compliance.
Banks and investors in Twitter/X will be hoping the fortunes and share price of the platform will turn around in 2024, or we could see its eighteen-year legacy up for sale again.
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