X’s financial health is steadily improving
Typically, banks financing acquisitions do not retain buyout debt for long.
However, in the case of Elon Musk’s social media platform X, Morgan Stanley and others have been forced to hold the debt, waiting for favorable market conditions and improvements in the company’s financial health to sell it without incurring significant losses.
That window is open now. On Wednesday, banks led by Morgan Stanley sold down $5.5 billion of the ~$13 billion in debt they lent to complete Musk’s $44 billion buyout of X. They marketed the deal last week with intentions to sell the debt for 90-95 cents on the dollar but managed to price it at a higher 97 cents.
X’s financials are private, but the debt sale and other positive headlines signal the company’s improving financial health. Notably, Musk shared that X saw substantial user growth in 2024, and X’s former top advertisers (Comcast, IBM, Disney, Warner Bros. Discovery, and Lionsgate Entertainment) resumed ad spending on the platform.
Although X is steadily improving, the deal is still considered one of the worst banks agreed to finance since the 2008 financial crisis, and it remains doubtful that investors will make a return given the steep initial price tag.
