Wall Street Banks Aim to Recover Elon Musk's Twitter Debt, Boosted by Trump's Re-election
Wall Street banks are optimistic about recovering their investments in Elon Musk's Twitter acquisition, leveraging his close ties to President Donald Trump.
Morgan Stanley and Bank of America are reportedly sounding out investors to purchase portions of the senior debt provided to Musk in 2022. This debt, offered at 90-95 cents on the dollar, carries the added incentive of a claim on Musk's AI startup, xAI Corp.
Despite initial losses due to Twitter's struggles, banks remain positive that Musk's profitability prospects have improved, backed by his alliance with Trump. Musk's privately held companies, including SpaceX, may also provide lucrative future IPO opportunities.
Trump's re-election has instilled optimism in Wall Street dealmakers, who anticipate loosened regulations and increased merger approvals. The administration's expected revision of capital rules further supports a favorable environment for corporate finance.
As Morgan Stanley CEO Ted Pick predicts, "Corporate finance activity could resemble the mid-90s heyday."
Moreover, Bloomberg reports that xAI Corp.'s undisclosed $6 billion stake has boosted Twitter's valuation.
This latest debt sale initiative exemplifies the revitalized sentiment among Wall Street banks, who anticipate significant improvement in dealmaking throughout the year.