- Elon Musk’s Twitter acquisition ended up being the worst financing deal for banks since 2008, the WSJ said.
- The $13 billion in loans Musk took out have been stuck on banks’ balance sheets.
- The loans have cut into pay for bankers and lenders’ ability to finance other deals, the Journal reported.
I wonder what part of the deal is causing a loss? A loan under no normal circumstances can lose money. They gave Musk $13B that he had to pay back with interest. As collateral he had to put up Tesla stock. How can that lose money?
twitter is losing revenue and cant pay the principle on the loan. nobody will buy this debt from the banks that issued the loan because twitter is a sinking ship. the great majority of elon’s wealth is tied up in tesla stock, so if he sells any the value of the rest of what he holds goes down because the sale effects the stock price… basically nobody is solvent enough to repay the loans, so the banks that issued the loans are stuck with them instead of selling that debt to get it off their books fast.
If Musk has to sell Tesla stock to pay back the loan, what does the bank care? There is something not being reported about the loan terms that they could lose money.
the bank doesn’t care, but musk does. cashing out some tesla stock to pay the twitter loans hits him twice so he wont do it except out of desperation.
Again why does the bank care? The article claims the bank gets interest and has Tesla shares as collateral. If Musk doesn’t pay they take the shares. So how are they losing?
Boo hoo either Elon loses or the bank. Anyways.
I was hoping for some details to explain the mystery.
The bank cares because