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Drudge Retort: The Other Side of the News
Sunday, August 25, 2024

X is facing yet another legal case in the shape of a breach of contract claim from IT infrastructure provider Wiwynn over non-payment for $120 million in components it procured for the Elon Musk-owned biz.

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Another cheap loser that thinks they're important.

#1 | Posted by LegallyYourDead at 2024-08-24 10:48 PM | Reply

So...

Fmr Pres Trump's toad seems to be following in fmr Pres Trump's footsteps, i.e. not paying bills?

Maybe that is why fmr Pres Trump wants to continue his tax-cuts for the uber-wealthy and cause the Country to lose at least 2 trillion dollars per year.



#2 | Posted by LampLighter at 2024-08-24 10:59 PM | Reply | Newsworthy 1

The hits keep coming for Apartheid Elmo.

World Bank halts paid advertising on X after CBS News finds its promoted ad under racist content

www.cbsnews.com

#3 | Posted by reinheitsgebot at 2024-08-24 11:04 PM | Reply

Elon Musk's $44 billion Twitter purchase ranks as worst deal for banks since the financial crisis

www.wsj.com

#4 | Posted by reinheitsgebot at 2024-08-24 11:27 PM | Reply

Then there's this ...

Banks Still Stuck with $13 Billion in Risky Loans from Musk's LBO of Twitter 22 Months Ago, Possibly the Longest Hung Deal of this Size Ever
wolfstreet.com

... When Elon Musk bought Twitter in a leveraged buyout for $44 billion in October 2022 -- after he'd walked away from the deal, after which Twitter had sued him to force him to stick to the deal -- he and other investors put in about $30 billion, and the acquiring holding company borrowed another $13 billion in junk-rated variable-rate high-risk loans from seven banks. Those banks had intended to sell those leveraged loans right away because they're too risky to carry on their balance sheet.

But that was 22 months ago, and the banks are still stuck with those loans and haven't been able to sell them without taking massive losses on them.

The seven banks are Morgan Stanley, Bank of America, Barclays, Mitsubishi UFJ Financial Group (MUFG), BNP Paribas, Mizuho, and Socit Gnrale. Obviously, doing business with the richest man in the world and getting a foot into the door with his six companies, and perhaps an IPO or two, such as SpaceX or Starlink, and the fee bonanza that would come with them, were huge incentives to engage in this risky deal.

This loan package has now turned into the biggest hung deal by dollar amounts of all times, Steven Kaplan, a finance professor at the University of Chicago who has tracked such deals since the 1980s, told the WSJ. ...




#5 | Posted by LampLighter at 2024-08-24 11:32 PM | Reply

HUNG DEAL Definition & Legal Meaning
thelawdictionary.org

... When an underwrite buys unsold securities and than sells them at a discount. This is also called a sticky or stuck deal. ...

Then there's this...

Elon Musk's Twitter buy: Add bankers to the list of victimswww.fastcompany.com

.. When Elon Musk decided to buy Twitter, he enlisted the help (and financial assistance) of seven major banks to back his offer, ultimately securing loans of $13 billion. It seemed a good bet for the financial institutions at the time.

Musk, after all, had a history of success with businesses -- and banks tend to sell that sort of debt, clearing their balance sheet and moving onto the next loan.

Those banks, however, haven't been able to sell the debt, in part because of the financial performance of Twitter, which is now known as X, and in part because of higher interest rates.

And while interest payments have been made, the principal of the loans remains.

That's causing problems.

Musk paid $44 billion for the social media site in October 2022. As of March 31, the holding has lost an estimated 71.5% of its value -- and the underperformance of those loans, reports the Wall Street Journal, is the worst the banking industry has seen since the real estate crisis of 2008.

In banking parlance, the loans are "hung," meaning banks can't offload them.

Pitchbook data, cited by the Journal, says they've been hung longer than every other hung loan since 2008.

They could, in some instances, be sold at a loss, but if Musk does ultimately repay them, the banks would not only recoup their initial investment, but interest payments that were set several points higher than what other investment companies are normally charged, due to the excessively high purchase price. (Annual interest payments total about $1.5 billion.) ...


#6 | Posted by LampLighter at 2024-08-24 11:44 PM | Reply | Newsworthy 1

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