Some Wall Street banks are hopeful that they will soon be able to sell the $13 billion in debt that supported the billionaire’s acquisition of the social media platform X, given Elon Musk’s political rise.
Several consortium lenders, including Morgan Stanley and Bank of America, believe Musk’s rise as a close assistant to Republican President-elect Donald Trump could improve X’s (formerly known as Twitter) chances.
According to the sources, that would enable them to sell the debt without suffering a significant loss on the transaction.
In the case of X, which Musk purchased for $44 billion in 2022, banks have been left holding the debt even though they usually sell these loans to investors shortly after the transaction is completed.
Laptops 1000Musk’s extensive platform modifications, which included firing numerous content moderators, and one of his posts on X scared off advertisers and reduced income. As the default risk rose, that decreased the debt’s value.
Some banks anticipated that X would see a spike in traffic in recent months as users flocked to the site around significant occasions like the US elections.
Trump has frequently commented on the network since Musk restored his account after the previous management banned him in January 2021.
According to the banking sources, they were interested in determining whether that and a strong US economy would result in higher platform revenues.
According to analysts, Musk’s connections with Trump, who appointed him to lead a new government agency focused on efficiency, may help the businessman’s numerous endeavors, which include SpaceX rockets, Tesla, and new future electric vehicles.
The days following the election results saw Tesla’s market value reach $1 trillion for the first time in two years.
