Wall Street banks are hopeful they can soon sell off $13 billion of debt tied to Elon Musk's social media platform X. They now believe that Musk's close relationship with President-Elect Donald Trump could improve X's prospects, allowing them to sell the debt without large losses.
Elon Musk’s growing political influence has made some Wall Street banks hopeful they can soon sell off $13 billion of debt tied to his purchase of the social media platform X (formerly Twitter), according to three banking sources.
The debt was used to help Musk buy X for $44 billion in 2022, but banks such as Morgan Stanley and Bank of America have struggled to sell it. They now believe that Musk's close relationship with Republican President-elect Donald Trump could improve X’s prospects, allowing them to sell the debt without large losses.
Banks typically sell loans to investors soon after a deal, but major changes Musk made to X—such as mass layoffs and reduced content moderation—drove away advertisers, cutting revenue and increasing the risk of default.
Recently, however, some banks have noticed more users returning to X during events such as the U.S. elections. Trump, whose account was reinstated by Musk after being banned in 2021, has been active on the platform. The banks hope this increased user activity, along with a strong U.S. economy, might boost revenue.
Analysts also believe Musk's ties to Trump, who appointed him to lead a new department on government efficiency, could benefit Musk’s other ventures, like Tesla and SpaceX. Notably, Tesla’s market value crossed $1 trillion for the first time in two years after the election results. The Trump campaign did not respond to requests for comment.
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