Write-downs burden banks’ balance sheets
The result is that write-downs on the value of the loans are now reflected in the banks’ balance sheets. In one case, this even had consequences for the remuneration of the responsible department, it was said, citing people involved.
Musk bought Twitter in October 2022 for around $44 billion. He raised most of the sum by selling shares in the electric car manufacturer Tesla US88160R1014, which he runs. At the same time, he received loans from seven banks, including top names such as Morgan Stanley and Bank of America US0605051046.
X is struggling with a loss of advertisers
One advantage of the situation for the banks could ultimately be that Musk will pay them back the loans in full. In the meantime, they collect high interest rates – which in turn are burdened by the online service, which is having problems making money. The short message service, which Musk has since renamed X, is struggling with the flight of major advertising customers. They fear for their image.
Last year, hate speech researchers demonstrated how advertisements from well-known brands can appear alongside anti-Semitic posts and posts from Nazi sympathizers. X denied that this was an everyday occurrence and sued the researchers – so far unsuccessfully. Most recently, X also dragged renegade advertisers to court, accusing them of colluding to keep advertising money away from the online service.
