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Wall Street banks prepare to sell up to $3B in X loans next week

109 点作者 x11antiek4 个月前

14 条评论

Animats4 个月前
&gt; Morgan Stanley and others, such as Bank of America and Barclays, lent Musk money to complete his $44 billion buyout of X, then known as Twitter, in 2022.<p>Hm. So who owes the debt? What&#x27;s the collateral? Supposedly Musk bought Twitter personally, but this looks like a leveraged buyout in trouble.<p>The banks involved had a &quot;sell-down letter&quot;, an agreement between the lenders that any sell-off gave the other lenders a right to participate at the same price. That expired ten days ago.[1] The interest charge is about $1.5bn&#x2F;year now. A big question is how long those loans run at the old interest rate. Rates are higher now. Total revenue from X is said to be about $1bn&#x2F;year, not that anybody outside really knows.<p>[1] <a href="https:&#x2F;&#x2F;finance.yahoo.com&#x2F;news&#x2F;exclusive-banks-funded-elon-musk-155724551.html" rel="nofollow">https:&#x2F;&#x2F;finance.yahoo.com&#x2F;news&#x2F;exclusive-banks-funded-elon-m...</a>
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BJones124 个月前
Bonds selling below par is common, so this article with very few details doesn&#x27;t say much.<p>IIRC Twitter LBO bonds were getting an average of 9.6% YTM when raised, and had maturities from 2027 to 2030. Selling at 90-95 means an increase in the yield of about 2% (napkin math says 1%-5%).
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churchill4 个月前
I wonder who&#x27;s going to be buying, since they&#x27;re selling at just a 5% discount. Since the purchase, Twitter has lost 85% to 90% of its revenues. So, I think the discount doesn&#x27;t factor in just how much value X has lost. And, unless Musk buys back the debt, I don&#x27;t see any takers lining up.<p>Judging by how much stock Elon had to sell, plus the loans&#x2F;equity raised for the initial purchase, it feels like an all-round bad decision.<p>From another perspective, judging by how X played a huge role in the 2024 election &amp; Elon&#x27;s new role as First Friend, maybe his rapidly improving fortune factors into the calculus.
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skc4 个月前
Whatever. I think X has been Musk&#x27;s most spectacularly succesful investment.<p>44 billion was a pretty small price to pay for the ultimate propaganda bullhorn.
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gexla4 个月前
I thought this was all normal? The only issue I have seen is that the banks couldn&#x27;t do this sooner?<p><a href="https:&#x2F;&#x2F;www.wsj.com&#x2F;tech&#x2F;elon-musks-twitter-takeover-is-now-the-worst-buyout-for-banks-since-the-financial-crisis-3f4272cb" rel="nofollow">https:&#x2F;&#x2F;www.wsj.com&#x2F;tech&#x2F;elon-musks-twitter-takeover-is-now-...</a>
auc4 个月前
Anyone buying at a 5% discount is torching money
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paulproteus4 个月前
I wonder if Musk will buy the loans.
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Ekaros4 个月前
Am I thinking right but say the coupon is 9,6. And now they are selling it at 10% loss. But they got this coupon for 2 years over say ~4 of more safe loans. They are not even now losing too much and certainly not at 5?
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ChrisArchitect4 个月前
Related:<p><i>Elon Musk email to X staff: &#x27;we&#x27;re barely breaking even&#x27;</i><p><a href="https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=42818026">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=42818026</a>
NotYourLawyer4 个月前
I’d pay no more than 30 cents on the dollar.
sitkack4 个月前
Is it public who buys these loans? Can we track them?
827a4 个月前
Twitter&#x2F;X is entirely a emperor has no clothes situation.<p>During Musk&#x27;s acquisition, Twitter officially stated that around 5% of the platform was bots; Musk tried to back out of the deal because he believed the methodology used to get to that number to be bad. On one occasion he stated an estimate of 20%, but said it could be &quot;much higher&quot;. Anyone who spends any significant time on X, post acquisition especially, is likely to agree with the &quot;much higher&quot; part of that.<p>(Remember this: Any time he&#x27;s on Joe Rogan or talking to anyone who thanks him for his &quot;service to America&quot; by purchasing Twitter: Elon Musk did not want to buy Twitter. He realized it was a bad purchase very quickly, and tried to weasel out of it multiple times. He is a low-intellect coward who makes bad decisions, but he does surround himself with people who can clean up the repercussions of his bad decisions.)<p>Estimates of how many total active users (humans + bots) are on X vary wildly; Musk has said &quot;600M monthly active&quot; as of May 2024; but as of Oct 2024 SOAX estimated something more like 335M, with 105M in the United States [1]. Depending on what numbers you believe and what percentage you believe to be bots, this means there&#x27;s anywhere between 10M-80M American Humans logging in to X on a monthly basis. The disparity between this number and the other major social networks is harrowing [2], as is the direction their user count [3] and advertiser count [4] is heading.<p>The xAI ambitions are also, put simply, bad decision making; which should come as no surprise given Elon Musk is not good at making decisions. AI is commoditized, and the majority of value in that space right now is being created in enterprise B2B, not B2C. xAI has no B2B plan; the combination of ChatGPT, Gemini, and Apple Intelligence rule the B2C zeitgeist, and there&#x27;s literally nothing differentiating xAI to justify its high price tag. xAI has no integration with the hardware people are buying (until they start shipping it to Teslas; that&#x27;s when you&#x27;ll know its over for Musk); nor do they really have control over the software.<p>The only shred of value X has left is Elon Musk&#x27;s personal connection to the President; yet he made it 3 days into the new Presidency before publicly ripping apart a major policy objective of the Trump administration; one that is well-aligned with his own business interests, because of a personal feud with Altman [5]. It seems very likely to me that Musk will self-sabotage that relationship within the first year. If the new purchasers of this debt believe they can use it to control him and leverage that relationship, they should be reminded that Tesla tried for years to get control of his Twitter shit-posting, and no one could. He cannot be controlled, and he has a demonstrated and catalogued history of engaging in public self-sabotaging behavior despite good and friendly counsel.<p>X&#x27;s bot problem isn&#x27;t only an issue for its advertisers and revenue; human, American ears listening to the things Musk posts is why the platform has value for Trump.<p>[1] <a href="https:&#x2F;&#x2F;soax.com&#x2F;research&#x2F;twitter-active-users?utm_source=chatgpt.com" rel="nofollow">https:&#x2F;&#x2F;soax.com&#x2F;research&#x2F;twitter-active-users?utm_source=ch...</a><p>[2] <a href="https:&#x2F;&#x2F;datareportal.com&#x2F;social-media-users" rel="nofollow">https:&#x2F;&#x2F;datareportal.com&#x2F;social-media-users</a><p>[3] <a href="https:&#x2F;&#x2F;mashable.com&#x2F;article&#x2F;elon-musk-x-declining-user-base-2025" rel="nofollow">https:&#x2F;&#x2F;mashable.com&#x2F;article&#x2F;elon-musk-x-declining-user-base...</a><p>[4] <a href="https:&#x2F;&#x2F;www.cnn.com&#x2F;2024&#x2F;09&#x2F;05&#x2F;business&#x2F;advertisers-x-withdrawal&#x2F;index.html" rel="nofollow">https:&#x2F;&#x2F;www.cnn.com&#x2F;2024&#x2F;09&#x2F;05&#x2F;business&#x2F;advertisers-x-withdr...</a><p>[5] <a href="https:&#x2F;&#x2F;fortune.com&#x2F;2025&#x2F;01&#x2F;24&#x2F;donald-trump-sam-altman-openai-elon-musk-feud-stargate&#x2F;" rel="nofollow">https:&#x2F;&#x2F;fortune.com&#x2F;2025&#x2F;01&#x2F;24&#x2F;donald-trump-sam-altman-opena...</a>
hugoromano4 个月前
I&#x27;m skeptical about Elon Musk being the richest person on the planet. My mantra these days? &#x27;Show me the money!&#x27; If Wall Street banks are preparing to sell $3B in X loans, maybe he should buy them back—with real cash this time.
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Hizonner4 个月前
I&#x27;ll give them $1.98.