It is still dealing with debt burdens after Elon Musk’s acquisition of Twitter. Accordingly, according to the last e-mail sent to employees, X’s financial problems are deepening. The major banks involved in the financing of the agreement took action to secure some of the debts.
Elon Musk is not happy with the growth rate for X
According to documents leaked in the USA, main banks such as Bank of America, Barclays and Morgan Stanley are preparing to sell some of the $ 13 billion debt they provided to finance the acquisition of Twitter. Banks will hold lower priority debt while planning to sell the debt for 90-95 cents on the dollar.
In his email to employees, Elon Musk admitted that user growth was stagnant, revenues were below expectations, and the company was barely meeting targets. Despite previously claiming that the company would generate cash flow within a few months, it faces annual interest payments of over $1 billion on loans used for the acquisition.
Banks’ decision to sell debt stems from the desire to avoid losses. Accordingly, investors reduced their share values by up to 78 percent. Banks also seem to have lost faith that the financial performance of the platform will improve.
Investors hope to benefit from Elon Musk’s connection with President Donald Trump. However, Elon Musk has not yet been able to realize his dream of “becoming the center for users’ entire financial lives” for X. Although the platform has added some new features, these features are not evidence of the transformation that Musk promises.
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