Typically, banks that lend money for takeovers try to quickly sell the debt to other investors so they can get it off their balance sheets.
But things haven't worked out that way for Morgan Stanley, Bank of America, Barclays, and the four other large banks that collectively lent Musk $13 billion for his buyout of Twitter — now renamed X — in October 2022. That's because Twitter's financials have performed so poorly that they haven't been able to find anyone willing to buy the debt, leaving them with some of the worst "hung" loans — meaning they can't be offloaded — of all time.
Though they're receiving interest payments on the loans, some are so desperate to offload that they've marked the loans down by hundreds of millions of dollars, according to theThe disastrous deal has also hurt the banks' position on the global stage. Per the report, Bank of America and Morgan Stanley both lost their top two spots in the banking league tables to JP Morgan and Goldman Sachs, which didn't loan Musk money for the Twitter takeover.
Some bigwigs at the financial institutions have been personally affected by the deal, too. Top investment bankers at Barclays, for example, were told last year that their pay would be cut by at least 40 percent from the year prior. And to them, we'll whip out an exceedingly small violin, because even before the Twitter deal went through, it was already clear that this was going to