Twitter’s Banks Are Stuck With Largest Chunk Of Unsold LBO Debt
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When I say Twitter'sTWTR 0.00%↑ bankers really, really want to unload the $13 billion LBO debt arranged back in April for Elon’s LBO of the company, it's not just because they already were losing more than $500 million before Elon closed the deal in October because interest rates had spike to multiyear highs.
It’s also because Elon is blowing up the company so quickly and so destructively that they couldn’t sell that debt even for 50-60 cents on the dollar. Now they are headed into year-end stuck with the largest chunk of merger debt overhang (left unsold) with 30% of the total $42 billion all US banks are trying to unload at a loss by year-end, as reported by Bloomberg.
I called this out as a key obstacle Elon has created that will hurt Twitter when it runs through its cash and existing borrowing capacity—which could happen in a quarter or two unless Elon comes up with more cash (see last night’s report Elon Is “Saving” Twitter To Death).
I remain skeptical of Elon’s claims that he’s recently sold nearly $4 billion in stock to “save” Twitter. It may be true, but this amount also corresponds with what I calculate as potential margin calls due on his loans against his plunging stock in Tesla TSLA 0.00%↑, based on Tesla’s latest proxy filing in March.
Given his track record, I expect Elon will do most anything to keep from spending his own money, right Tesla? Right, SpaceX?
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Twitter’s Banks Are Stuck With Largest Chunk Of Unsold LBO Debt
Twitter’s Banks Are Stuck With Largest Chunk Of Unsold LBO Debt
Twitter’s Banks Are Stuck With Largest Chunk Of Unsold LBO Debt
When I say Twitter's TWTR 0.00%↑ bankers really, really want to unload the $13 billion LBO debt arranged back in April for Elon’s LBO of the company, it's not just because they already were losing more than $500 million before Elon closed the deal in October because interest rates had spike to multiyear highs.
It’s also because Elon is blowing up the company so quickly and so destructively that they couldn’t sell that debt even for 50-60 cents on the dollar. Now they are headed into year-end stuck with the largest chunk of merger debt overhang (left unsold) with 30% of the total $42 billion all US banks are trying to unload at a loss by year-end, as reported by Bloomberg.
I called this out as a key obstacle Elon has created that will hurt Twitter when it runs through its cash and existing borrowing capacity—which could happen in a quarter or two unless Elon comes up with more cash (see last night’s report Elon Is “Saving” Twitter To Death).
I remain skeptical of Elon’s claims that he’s recently sold nearly $4 billion in stock to “save” Twitter. It may be true, but this amount also corresponds with what I calculate as potential margin calls due on his loans against his plunging stock in Tesla TSLA 0.00%↑, based on Tesla’s latest proxy filing in March.
Given his track record, I expect Elon will do most anything to keep from spending his own money, right Tesla? Right, SpaceX?
Stay tuned.
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