3 ms·
why would anyone want to buy this debt unless at a huge discount? and why would they be talking about write downs or potential default? Didn't they require Musk
by jjeaff 3y ago
why would anyone want to buy this debt unless at a huge discount? and why would they be talking about write downs or potential default? Didn't they require Musk's personal stock assets as collateral?
- Zigurd 3y agoDistressed debt is often a good investment. As for collateral, Twitter itself is the only collateral in these loans. You are thinking of margin loans, and IIRC Musk denied taking out margin loans. As it often is, distressed situations could be complex financially. For example, Musk might be lending money to Twitter to pay the banks' LBO loans. So anyone buying Twitter or taking posession of all or part of Twitter in a loan default would have to make sure there are no claims on twitter they don't know about.
- jjeaff 3y agoAt least some portion appears to be backed by margin loans. https://www.nasdaq.com/articles/elon-musk-faces-margin-call-on-loan-used-to-purchase-twitter https://www.nasdaq.com/articles/elon-musk-faces-margin-call-...
- Zigurd 3y agoThat's one reason I cited Musk's claims. Not all his claims are accurate.