Wall Street banks, including Morgan Stanley, are preparing to sell $3 billion in debt tied to Elon Musk’s social media platform, X, as early as next week, according to sources cited by Reuters.
The Wall Street Journal reports that the banks aim to sell the debt at a discounted rate of 90 to 95 cents on the dollar. However, Elon Musk has denied the report’s accuracy, stating on X, “The Journal is lying.”
The debt originates from the $44 billion acquisition of Twitter (now X) in 2022. Banks such as Morgan Stanley, Bank of America, and Barclays financed the deal, typically with plans to sell the debt to investors soon after. In the case of X, however, they encountered difficulties in offloading the debt.
Under Musk’s leadership, X underwent significant changes, including layoffs of the content moderation team, leading to concerns among advertisers. This lack of confidence contributed to declining revenue and reduced the value of the debt.
Efforts to sell the debt in late 2022 would have forced banks to accept losses of up to 20%. However, Musk’s growing political influence and the potential return of advertisers are providing some relief to banks as they proceed with the debt sale.