Wall Street hopes to get rid of a bad Elon Musk bet

Compare
Payout Min deposit Promo code Win rate(%) Welcome bonus Rating
Gama
60 min. 20 $ RUBYSKYE 60 % 500 + FS
PLAY NOW
1win
2 hr. 20 $ RUBYSKYE 60 % 500 + FS
PLAY NOW
Promo
Catcasino
60 min. 40 $ RUBYSKYE 60 % 500$ +150 FS
PLAY NOW
Promo
Vavada
60 min. 40 $ RUBYSKYE 60 % 500$ +150 FS
PLAY NOW
Better
60 min. 20 $ RUBYSKYE 60 % 500 + FS
PLAY NOW

Wall Street banks are hoping this is the week when they can start to recover more from the bad bets they made on Elon Musk’s Twitter buyout.

Morgan Stanley (MS) and Bank of America (BAC) are among the banks that plan to sound out investors in the coming days to buy portions of debt initially provided to Musk in 2022 to take over the social media platform now known as X, according to people familiar with the matter.

The Wall Street Journal earlier reported on the banks’ plans, noting that they are shopping senior portions of the debt that would give them back around 90 to 95 cents on the dollar.

Bloomberg separately reported that the offer from the banks is coming with the added incentive of a claim on X’s interest in Musk’s AI startup xAI Corp.

Big banks fronted $13 billion in financing when Musk bought Twitter in October 2022 for $44 billion. But those loans lost value as the X struggled, and the banks weren’t able to get them off their books without taking significant losses.

This video grab taken from a video posted on the Twitter account of billionaire Tesla chief Elon Musk on October 26, 2022 shows himself carrying a sink as he enters the Twitter headquarters in San Francisco. (Photo: Twitter account of Elon Musk/AFP via Getty Images) · – via Getty Images

These banks could still earn above break even on the loans from their more junior debt stakes if X’s profitability improves.

The hope now in selling the senior portions of the debt is that future prospects for X are seen as rosier given Musk’s close alliance with President Donald Trump. And banks would be remiss to lose such a client as Musk, the world’s richest man.

See also  Best Chargers vs Chiefs Player Props to Bet for SNF in Week 14

For instance, Musk owns several private companies that may one day go public through an initial public offering, including rocket and satellite company SpaceX that hopes to launch rockets to Mars.

“We will pursue our manifest destiny into the stars, launching American astronauts to plant the stars and stripes on the planet Mars,” Trump said last week during his inauguration address.

The comments prompted two thumbs and a smile from Musk, who was seated in the third row behind the new president.

Elon Musk reacts as President Donald Trump speaks after taking the oath of office at the 60th Presidential Inauguration in the Rotunda of the U.S. Capitol in Washington, Monday, Jan. 20, 2025. (Kevin Lamarque/Pool Photo via AP)
Elon Musk reacts as President Donald Trump speaks after taking the oath of office in the rotunda of the U.S. Capitol in Washington. (Kevin Lamarque/Pool Photo via AP) · ASSOCIATED PRESS

The valuation of X is being boosted by a previously undisclosed stake of about $6 billion in xAI Corp., Musk’s AI startup, according to a Bloomberg report Monday.

The new push by banks to sell this debt is the latest example of how the arrival of the new Trump era has Wall Street dealmakers newly optimistic about their fortunes.

The stocks of the biggest US lenders rallied following the election of Trump on hopes that his administration would loosen some rules and apply more leniency in approving corporate mergers.

The Trump administration is expected to scrap or revise a set of proposed capital rules that would have crimped future industry profits.

So long as current conditions remain in markets and the economy broadly, dealmaking should improve through the year, Morgan Stanley CEO Ted Pick told analysts earlier this month.

See also  Nuclear and Renewable Energy Stocks Have Lost Their Shine

Translate »