Elon Musk took out around 13 billion dollars in loans to buy Twitter. And the banks involved are not happy about that because they cannot resell the loans as usual.
The loans of around 13 billion dollars that banks gave Elon Musk to buy Twitter have so far been a bad deal for them, according to a media report.
Usually, credit institutions quickly pass such debts on to other investors. But in this case, the banks themselves were left with the loans, as the Wall Street Journal reports. The reason is that, given the weak financial situation of the online service, they would only have been able to get rid of them at a high discount.
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 Tesla, the electric car manufacturer he runs. At the same time, he received loans from seven banks, including top names such as Morgan Stanley and Bank of America.
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.
Read more celebrity news here:
Follow News.de already at Facebook, YouTube and WhatsApp? Here you will find the latest news, current videos and a direct line to the editor.
kns/roj/news.de
