The WSJ reported on Tuesday that the debt for Musk's Twitter purchase has been stuck on banks' balance sheets, eating into the ability to fund other deals.
  • Elon Musk’s Twitter acquisition ended up being the worst financing deal for banks since 2008, the WSJ said.
  • The $13 billion in loans Musk took out have been stuck on banks’ balance sheets.
  • The loans have cut into pay for bankers and lenders’ ability to finance other deals, the Journal reported.
  • Blue_Morpho@lemmy.world
    19·
    4 months ago

    I wonder what part of the deal is causing a loss? A loan under no normal circumstances can lose money. They gave Musk $13B that he had to pay back with interest. As collateral he had to put up Tesla stock. How can that lose money?

      • Blue_Morpho@lemmy.world
        161·
        4 months ago

        If Musk has to sell Tesla stock to pay back the loan, what does the bank care? There is something not being reported about the loan terms that they could lose money.

        • AA5B@lemmy.world
          1·
          4 months ago

          The bank cares because

          • he can’t sell $13B in stock without crashing the value - he can’t pay it off fast
          • someone with that much ownership has serious restrictions on how they can sell. Again, limiting ability to pay off loans
          • banks generally don’t keep loans, they originate and sell. But no one will buy with those restrictions
          • Blue_Morpho@lemmy.world
            1·
            4 months ago

            It was 2 years ago. Interest payments are continuous, not sudden. If he owed money he would sell a little every month to pay the loan. Yes it would lower the price. The bank doesn’t care, they are being paid.

            Yes large ownership sales are filed quarterly. It’s not a surprise loan. The payments are due monthly.