San Francisco, August 21: Elon Musk bought Twitter in October 2022 for USD 44 billion. Later, he renamed the social and news platform "X". The change was reflected in the logo, features, overall design, and feel of the previously known "Twitter". Regarding the X, the tech billionaire said that he would allow "freedom of speech" on his platform and lose money to maintain free speech than to be censored.

According to a report by the Wall Street Journal, Elon Musk borrowed USD 13 billion from several financial institutions to buy Twitter. The report said that it turned into the "worst merger-financial" deal for these banks since the 2008-09 global economic crisis. Severn significant banks were involved in lending the amount to the tech billionaire's holding company, now known as X. Jobs Coming in Gujarat: Semiconductor Company Suchi Semicon To Invest USD 100 Million in Indian State, Generate 1,200 Jobs.

Another report by the Morning Star highlighted that Elon Musk's 13 billion borrowed money became a financial burden for banks like Morgan Stanley, Bank of America, Barclays and others. The WSJ report has termed the loan amount " hung debt, " meaning the banks had been unable to sell it. The reason for this debt is caused by the lowering value of the X platform since the buyout. 

The report mentioned that Elon Musk's social platform was valued at USD 19 billion last year, which is significantly low compared to the USD 44 billion spent on buying Twitter. Citing WSJ, the report mentioned that the banks accumulated paper losses on this "hung debt, " totalling hundreds of millions of dollars each. Due to this, the banks were not able to finance other deals as they had to reduce the capital. 

The USD 44 billion Twitter buyout deal reportedly became the largest "hung" deal since the historic collapse of Lehman Brothers around 16 years ago. Further, the loss has been stuck to the banks' balance sheets longer than other "hung debts" since the 2008 global financial crisis. The report mentioned that it would be doubtful if the Twitter value could reach the USD 44 billion that Elon Musk paid two years ago. The financial strain is said to have affected bank employees and reduced the potential bonuses. Airtel Payments Bank New Update: Bharti Airtel Subsidiary Company Introduces AI-Powered Face Match Feature for Account Security; Check Details and Know How It Works.

The seven banks that lent the money to Elon Musk to buy Twitter, besides Morgan Stanley, Bank of America and Barclays, include BNP Paribas, Mitsubishi UFJ Financial Group (MUFG), Mizuho Bank and Societe Generale.

(The above story first appeared on LatestLY on Aug 21, 2024 04:00 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).