Bad Buyout Blues: Banks Ready To Refinance Twitter/X Debt From $44-Billion Acquisition
Portfolio Pulse from Chris Katje
Elon Musk's $44 billion acquisition of X (formerly Twitter) involved financing from personal funds, Tesla stock sales, and contributions from investors like Fidelity, Ark Invest, Baron Funds, and Jack Dorsey. Banks, led by Morgan Stanley (NYSE:MS), are seeking to refinance about $12.5 billion in debt from the deal. Morgan Stanley, which covered a quarter of the debt, reported $876 million in losses from corporate loans in 2022. The banks have agreed not to sell their debt until X is financially stable. Fidelity has adjusted X's valuation, currently at $14.1 billion, amidst a boycott and potential for additional capital raising by Musk.
March 05, 2024 | 6:10 pm
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NEUTRAL IMPACT
Morgan Stanley, leading the refinancing of $12.5 billion in debt from the X acquisition, reported $876 million in losses from corporate loans in 2022.
Morgan Stanley's involvement in refinancing the debt from the X acquisition is significant due to its role as the largest bank lender and its substantial losses from corporate loans in 2022. The effort to refinance the debt indicates a move towards financial stabilization for X, which could indirectly impact Morgan Stanley's financial outlook. However, the outcome of these refinancing efforts and their direct impact on Morgan Stanley's stock price in the short term remains uncertain, hence a neutral score.
CONFIDENCE 85
IMPORTANCE 75
RELEVANCE 90