In October 2022, by purchasing the social network Twitter, which he later renamed X, American billionaire Elon Musk raised about $13 billion of the $44 billion he needed in the debt market. Only now Musk’s creditors have decided to assign this debt, and only partially. Musk himself admitted to X employees that she was barely covering her own losses.
Image source: Unsplash, Alexander Shatov
As The Verge notes, citing excerpts from Elon Musk’s address to X employees published by The Wall Street Journal this month, “the social network’s user base growth is stagnant, revenue is underwhelming, and we are barely avoiding loss.” According to sources, Musk’s creditors planned to resell the debt soon after the deal to buy Twitter was finalized at the end of 2022, but then they would have been able to earn no more than 78 cents on every dollar.
The victory of Donald Trump in the US presidential election in November last year and the proximity to him by Ilon Mask, according to sources, increased the chances of helping the billionaire more money for the debt obligations of the billionaire, since investors believed in the potential progress of his companies against the backdrop of a political take -off of the political Careers. Now banks are expected to get 90–95 from each dollar of debt obligations, but they plan to implement only $ 3 billion in the market. The transaction may take place next week, Morgan Stanley is going to take part in it.
Musk initially hoped to bring X to breakeven within a few months shortly after the deal to buy the social network, but it still requires more than $1 billion annually in interest payments on loans alone. By the end of 2024, Musk promised to turn X into a super platform that would be equipped with powerful financial instruments, but for now he is more often using it for his experiments in the field of artificial intelligence. The company continues to have problems attracting advertisers, and Musk is also facing legal claims from regulators regarding the period leading up to the deal to buy Twitter.