Wall Street Banks to Sell X Debt at Discount

Debt Associated with Elon Musk’s X (Formerly Twitter) Set to be Offloaded

Financial institutions are preparing to divest themselves of the debt incurred to finance Elon Musk’s acquisition of the social media platform X, previously known as Twitter. The total cost of the 2022 purchase amounted to $44 billion, with $13 billion being provided as financing.

Morgan Stanley is at the forefront of this effort, aiming to sell the senior debt at a price ranging from 90 to 95 cents for every dollar of face value, according to reports from the Wall Street Journal.

Typical Debt Holding Periods and Recent Challenges

Generally, banks do not retain debt for extended periods. However, periods of market instability can disrupt these timelines.

Since Elon Musk’s takeover of the platform, X has experienced significant volatility. This has been largely driven by an exodus of advertisers, who expressed concerns that the presence of extreme content could negatively impact their brand reputations.

Financial Performance and Internal Assessments

Despite reports from the Wall Street Journal indicating improvements in X’s financial standing, Elon Musk communicated a different assessment to employees in a January email. He stated that user growth had stalled, revenue was underwhelming, and the company was operating with minimal profitability.

Musk highlighted X’s influence in “shaping national conversations and outcomes” within the same communication.

Potential Impediments to Advertiser Return

It remains uncertain whether the platform’s perceived influence is sufficient to attract returning advertisers.

Furthermore, a gesture made by Musk during President Trump’s inauguration – widely interpreted as a fascist salute – could present additional challenges in securing partnerships with major brands.

This incident may further complicate efforts to rebuild trust and attract advertising revenue to the platform.