Banks Struggle to Sell Musk's $13B Debt for Twitter Purchase

X, previously known as Twitter, is currently facing significant financial challenges following Elon Musk's $44 billion acquisition, which was largely financed through a $13 billion loan from major banks including Morgan Stanley and Bank of America. This deal has been labeled the worst merger-finance transaction for banks since the 2008-2009 financial crisis, raising concerns about the viability of the investment. The primary issue stems from the banks' inability to offload the debt associated with the acquisition. Typically, banks sell off such loans to other investors, allowing them to earn fees and mitigate risk. However, X's poor financial performance has left these loans stranded, creating what industry insiders refer to as “hung deals.” This situation has placed a considerable burden on the banks involved, as they are now stuck with the debt. The Wall Street Journal reports that the banks were initially drawn to the deal due to the prestige of financing the world’s richest individual, Musk. However, this decision is now being scrutinized as a potentially costly error. The banks are left hoping to recover their investments through interest payments from X and the eventual repayment of the principal when the loans mature. As X continues to navigate its financial difficulties, the implications of this acquisition extend beyond Musk and the platform itself, potentially impacting the banking institutions that took on this high-risk venture.