Elon Musk will evade the lawsuit and end the originally agreed-upon $44 billion Twitter buyout operation. Although he is the richest man in the world, he will not buy the social network with his own money. Several American banks co-financed the operation. 13 billion dollars. They may already regret their promise.
It is now well known that Elon Musk is the richest man in the world. That’s probably why when he asked them to help him with the takeover of Twitter for a modest $44 billion, Morgan Stanley’s bankers didn’t have the courage to say no to him. Still, according to Bloomberg’s calculations, it’s impossible for lenders to see a return on investment. On the contrary, the latter is more likely to suffer a problem. 500 million dollars lost.
Banks poised to lose $500m in deal
Last spring, when the American businessman made an offer to buy Twitter, seven banks pledged to finance the deal. By getting back some of Twitter’s debt. In this way, financial institutions theoretically ensure that the interest is recovered in addition to the loan amount. According to the economists who reviewed the transaction, the current value of Twitter’s debt would not allow the consortium to take its bet back even if it managed to resell it.
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According to experts, the current economic context is much less favorable than last spring. Banks devoted to Elon Musk want to withdraw because Selling Twitter’s debt to investors has become impossible. They cannot legally cancel the contract with the South African magnate and are therefore prepared to lose several hundred million dollars. Their last hope lies in Elon Musk’s erratic behavior. In recent weeks, the latter has been blowing hot and cold about the Twitter takeover. Could he have changed his mind and canceled the transaction again? In any case, people close to the dossier say he’s done nothing so far to finish his credits. If the deal is not closed by October 28, Twitter and Elon Musk will settle their disputes in court.