[Alexander Saeedy and Dana Mattioli at The Wall Street Journal]

"The $13 billion that Elon Musk borrowed to buy Twitter has turned into the worst merger-finance deal for banks since the 2008-09 financial crisis."

"[...] The banks haven’t been able to offload the debt without incurring major losses—largely because of X’s weak financial performance—leaving the loans stuck on their balance sheets, or “hung” in industry jargon. The resulting write-downs have hobbled the banks’ loan books and, in one case, was a factor that crimped compensation for a bank’s merger department, according to people involved with the deal."

Let that sink in.

It's not like this was unpredictable: it was obvious that Elon Musk was not going to turn Twitter into a roaring success. While Twitter was, at its heart, a media company, Musk's direction has been a muddle of three sometimes-competing priorities: his long-held desire to create X, an "everything" app; his desire to build his own brand in an effort to boost his own equity and therefore wealth, sometimes in ways that got him in trouble with the SEC; and his desire to influence global politics.

There's no three-dimensional chess being played here; this likely isn't an intentional plan by Musk to write off the debt. It's simply narcissistic mismanagement, and one has to wonder how this will affect his businesses at Tesla and SpaceX in the longer term. There will come a time when shareholders declare that enough is enough - although given that they approved his ludicrous pay deal, perhaps that time isn't coming soon.

#Technology

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