Wall Street banks are gearing up to sell off up to $3 billion in debt tied to Elon Musk’s acquisition of X (formerly Twitter). Morgan Stanley (MS), Bank of America (BAC), and Barclays (BCS) are all hoping to sell senior debt at 90-95 cents on the dollar. This move comes as the banks aim to reduce their exposure from the $13 billion financing used for Musk’s $44 billion buyout of X in 2022.
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Putting on the banks’ spectacles, this sale is a crucial step towards easing the financial burden of the deal, which has been a thorn in their side since the acquisition. So far, the debt has been a tough sell due to X’s rocky performance and the high price Musk paid for the platform. However, recent improvements in X’s financials and Musk’s rising influence in political circles have sparked renewed investor interest.
What Does it Mean for X?
For starters, successfully selling the debt could alleviate some of the company’s financial pressure. X has been struggling with stagnant user growth and uninspiring revenue, barely breaking even, as Musk himself admitted in a recent email to staff. Also, the platform’s annual interest payments have skyrocketed to over $1 billion, making it crucial for X to stabilize its finances.
Even with these problems, advertisers gradually return to the platform, and X is doing better financially. Musk’s partnership with President Trump and his push to make X a free speech platform have also helped improve the company’s image. Nevertheless, Musk’s ambitious plans to transform X into a financial giant and an “everything app” are still on the cards, but it remains to be seen whether these efforts will come to fruition.
X is not publicly traded, so we present you with his default company, Tesla’s Analyst Forecast. On Wall Street, Tesla is a Hold, with the average price target for TSLA stock being $345.11, reflecting a 15.12 downside potential.