So Morgan Stanley and a group of banks were trying to offload $3 billion in loans tied to X (formerly Twitter), but now they’re increasing it to $5.5 billion because investor demand is stronger than expected. They’re hoping to sell it for at least 95 cents on the dollar. Some investors see this as a bet on Musk’s influence in Washington, but others are skeptical. What do you guys think?
Honestly surprised investors are jumping back in after how much revenue X lost when Musk took over.
Gale said:
Honestly surprised investors are jumping back in after how much revenue X lost when Musk took over.
Yeah, banks got stuck with $13 billion in debt from the buyout. Now they’re trying to dump as much of it as possible.
Isn’t this just investors hoping Musk’s ties to Trump will make X more valuable?
Flynn said:
Isn’t this just investors hoping Musk’s ties to Trump will make X more valuable?
Pretty much. Some think Musk’s influence in Washington will help his businesses, so they’re willing to take the risk.
@Corey
So they’re betting on politics instead of actual business performance?
The banks already sold $1 billion of this debt earlier, so they’re testing how much more they can unload.
Sky said:
The banks already sold $1 billion of this debt earlier, so they’re testing how much more they can unload.
If they get rid of this chunk, they’ll still have the unsecured debt left… that’s gonna be way harder to sell.
What does ‘secured vs. unsecured’ mean in this case?
Thorne said:
What does ‘secured vs. unsecured’ mean in this case?
Secured debt has creditor protections, so investors have a better chance of getting their money back. Unsecured debt is riskier.
X’s stake in Musk’s AI startup xAI is apparently part of the pitch to investors. No idea if that makes it a safer bet though.
Vance said:
X’s stake in Musk’s AI startup xAI is apparently part of the pitch to investors. No idea if that makes it a safer bet though.
Yeah, Morgan Stanley even held a meeting to sell that angle. Guess they’re trying everything to make this look good.