Musk X platform leverages Trump's influence to attract investor interest; can bank debts finally be transferred?

Elon Musk's X platform plans to buy back the last portion of debt related to the acquisition of social networks that Wall Street banks have held for many years. According to Bloomberg, citing informed sources, approximately $1.2 billion of the repurchase funds may partially come from the company's recent equity financing. Additionally, Musk's special relationship with Trump has successfully attracted investor interest.

Morgan Stanley's special bank takes on $13 billion in debt and can finally transfer it.

Elon Musk privatized Twitter in October 2022 at a price of $54.20 per share, totaling approximately $44 billion. Twitter stock TWTR was officially delisted from the New York Stock Exchange. It was renamed X, marking the end of the blue bird that Musk despised.

However, during this period, the advertising and traffic of X declined, resulting in a significant drop in X's valuation. The seven banks that initially underwrote approximately $13 billion in debt for Twitter tried to sell part of the debt at a steep discount to mitigate the losses on their balance sheets. This debt buyback by the company will allow the group of seven banks led by Morgan Stanley to eliminate the riskiest portion of loans on their balance sheets.

The special relationship between Musk and Trump successfully attracts investors' interest.

Due to Elon Musk's unique relationship with President Trump, as well as the tech mogul's recent close ties with the White House, Morgan Stanley has found that investors are very interested in the debt of the company now known as X. Potential buyers who have understood X's financial situation have seen signs of a rebound. Another benefit is that investors can also gain shares in the company's artificial intelligence project, xAI, led by Musk.

Insiders revealed that Morgan Stanley's promotion includes showing X's adjusted profit for 2024, with earnings before interest, taxes, depreciation, and amortization (EBITDA) amounting to approximately 1.2 billion dollars. Financial data also reflects that X benefited from election-related discussions, with fourth-quarter revenue at 710 million dollars and EBITDA around 400 million dollars, both higher than the previous two quarters.

According to sources familiar with the sales process led by Morgan Stanley, the bid for the acquisition loan was originally about 60 cents and has now reached or exceeded 95 cents.

The currently sold $3 billion debt will mature in 2029, and the interest paid will be 6.5% higher than the benchmark secured overnight financing rate. This equates to a high yield of about 12%.

In addition, after Musk took over this social media company and renamed it, Twitter's iconic bird logo was removed from the company's former headquarters in San Francisco, but it was recently sold at an auction for nearly $35,000.

This article discusses how Musk's X platform leverages Trump's influence to attract investor interest, and whether bank debts can finally be offloaded? First appeared in Chain News ABMedia.