Latest news with #MorganStanley-led
Yahoo
25-04-2025
- Business
- Yahoo
New financials from Musk's X debt sale show changing company
(Bloomberg) — Elon Musk's X Holdings Corp. is evolving from a social media platform powered by mainstream advertisers to one betting on dollars generated from artificial intelligence and subscriptions — a change that appears to have buoyed its revenue lately. The platform, formerly known as Twitter Inc., posted $91 million in revenue tied to data licensing and subscriptions in February, a 30% increase from a year earlier, according to materials shared with investors related to a new debt sale. Advertising revenue also grew, though at a more modest 4% clip, the materials show. A representative for X declined to comment. It's a contrast from when Musk bought X nearly three years ago. The platform was heavily reliant on ads from conventional blue-chip companies, but saw that kind of revenue erode under his leadership as the billionaire implemented severe changes to its business model. Ad revenue has since stabilized, albeit at a lower level, while revenue from data licensing and subscriptions has grown, according to the materials shared with investors. Meanwhile, Musk's decision to combine X with his artificial intelligence company xAI last month only further reshaped its focus. Twitter posted advertising revenue of $4.5 billion in 2021, its final full year as a publicly traded entity before Musk's acquisition. It is projected to generate $2.26 billion in global ad sales this year, up 16.5%, according to Emarketer, Bloomberg previously reported. Still, with X's revenue on the mend, its costs sharply lower and its leader tied closely to US President Donald Trump, investors have been feeling more optimistic. Morgan Stanley launched a sale on Thursday of the final bits of debt related to Musk's 2022 buyout of the company after a sharp turnaround in sentiment about its prospects. In its financial disclosures, X boasted nearly $1.5 billion in annual earnings before interest, taxes, depreciation and amortization, a common earnings metric known as 'Ebitda' on Wall Street. Its improving metrics allowed the company to raise almost $900 million in a new equity round from Musk and other investors that valued the company at $44 billion — around the same valuation he bought it at — Bloomberg previously reported. X's balance sheet is improving as well, according to the financials recently shared with investors. The company now has almost $1.1 billion of cash on hand, up from the roughly $120 million to about $320 million it maintained during the year through January. It expects to use some of those funds to either repay the $12.5 billion in expensive debt it still owes or else fund tech investments and use it for other purposes. Debt is still weighing on Musk's firm. In March alone, X paid about $200 million in debt-servicing costs related to its buyout, said people familiar with the matter who were not authorized to speak publicly. The firm's annual interest expense by the end of 2024 was more than $1.3 billion, they added. The Morgan Stanley-led debt offering kicked off on Thursday is intended to refinance a final, expensive part of X's buyout financing that carries a 14% interest rate. Banks are marketing the debt with a 9.5% fixed coupon, which would help cut costs for the company. X expects to reduce its annual interest expense by $43 million, the people said. X's heavy debt load has been an issue not just for the company, but for the banks that helped Musk buy out the company. The lenders had held onto about $12.5 billion of that debt, unable to sell it to investors until January and February of this year, when they offloaded about $11.2 billion's worth across three sales. A month ago, Musk said xAI, Musk's artificial intelligence startup, had acquired X. Information shared with investors shows that he created a holding company, dubbed XAI Holdings, that owns both X and xAI. In earlier debt sales, banks and company management had touted X's relationship with Musk's startup as a sweetener to spur investor interest. —With assistance from Kurt Wagner. (Updates with detail about bank's X loan sales in paragraph 14) ©2025 Bloomberg L.P. Sign in to access your portfolio
Yahoo
05-02-2025
- Business
- Yahoo
Morgan Stanley Selling $5.5 Billion of X Debt on Demand Surge
(Bloomberg) -- A group of Morgan Stanley-led banks is selling $5.5 billion of debt tied to Elon Musk's social-media platform X after receiving stronger-than-expected demand from investors, according to people with knowledge of the matter. State Farm Seeks Emergency California Rate Hike After Fires Transportation Memos Favor Places With Higher Birth and Marriage Rates NYC's Newest Transit Leader Builds a Worker-Driven Strategy New York's First 'Passive House' School Is a Model of Downtown Density San Francisco Wants Wealthy Donors to Help Fix Fentanyl Crisis The banks initially planned to sell about $3 billion worth of the loan but received enough interest to parcel out additional debt. They are now selling the entire remaining slug of the highest-ranking borrowings used to fund Musk's buyout of the platform formerly known as Twitter Inc., marking a significant milestone in their effort to free their balance sheet from the X exposure. The loan is being priced at 97 cents on the dollar, the people said, representing a smaller discount to par than initially expected — a move that all but guarantees no losses for the banks from the largest portion of X-related borrowings. The banks already sold $1 billion worth of the term loan earlier this month as a way to test investor appetite. A spokesperson for Morgan Stanley declined to comment. X didn't immediately respond to a request for comment. The Wall Street firms got stuck with $13 billion of debt that Musk heaped on X during his surprise bid to take it private in 2022. While banks typically try to resell debt they commit to fund an acquisition quickly, investors balked in this case after Musk upended X's business, laid off staff and sparked a steep revenue decline. Investors are now returning, drawn to the prospect of Musk-linked businesses benefiting from his relationship with President Donald Trump. The billionaire businessman used his ownership of X and his prominent perch on the platform to push for Trump's return to the White House and now has established himself as a key adviser to the president. His growing reach across Washington has already proved to be a lightning rod, setting off criticism from Democrats warning of overreach. For X, though, it has resulted in advertisers inching their way back onto the platform, according to bankers pitching the debt to investors. Another potential selling point is that investors will gain exposure to X's stake in Musk's artificial-intelligence startup xAI, which could prove to be valuable and benefit creditors down the line. When the acquisition closed, banks got stuck with three tranches of debt totaling $13 billion. The largest portion was a $6.5 billion term loan, meant to be sold to investors, with the rest divided up into secured and unsecured junk banks will still have exposure to the latter portion, which may be harder to sell close to face value because it doesn't offer the same level of creditor protections. To bolster enthusiasm for the offering, Morgan Stanley shared new financials for X and hosted a meeting with some of the company's top executives at the bank's office in Manhattan. --With assistance from Carmen Arroyo. Amazon and SpaceX Want In on India's Satellite Internet Market Inside Elon Musk's Attack on the US Government Elon Musk Inside the Treasury Department Payment System Believing in Aliens Derailed This Internet Pioneer's Career. Now He's Facing Prison The NFL's Flawed DEI Program Still Beats What Most Companies Are Doing ©2025 Bloomberg L.P.
Zawya
05-02-2025
- Business
- Zawya
Morgan Stanley to increase sale of loans tied to Musk's X, Bloomberg News reports
A group of Morgan Stanley-led banks is set to increase a sale of loans tied to Elon Musk's social media platform X after receiving stronger-than-expected demand from investors, Bloomberg News reported on Tuesday. The banks had initially planned to sell about $3 billion worth of loans, Reuters reported last month. However, they are now aiming to sell as much as $5.5 billion of the debt sitting on their books, the Bloomberg report said, citing people familiar with the matter. In November, Reuters also reported that Musk's political ascendancy and proximity to President Donald Trump had banks pondering over the improved prospects of the social media platform, helping them selling the debt without having to take a massive loss on the deal. Morgan Stanley and others, such as Bank of America and Barclays, lent Musk money in 2022 to complete his $44 billion buyout of X, then known as Twitter. Banks typically sell such loans to investors soon after a deal is done, but lenders have faced difficulties in offloading the debt in the case of X. Morgan Stanley did not immediately respond to Reuters' request for comment.
USA Today
05-02-2025
- Business
- USA Today
Morgan Stanley to increase sale of loans tied to Musk's X, Bloomberg News reports
Jaiveer Singh Shekhawat Reuters A group of Morgan Stanley-led MS.N banks is set to increase a sale of loans tied to Elon Musk's social media platform X after receiving stronger-than-expected demand from investors, Bloomberg News reported on Tuesday. The banks had initially planned to sell about $3 billion worth of loans, Reuters reported last month. However, they are now aiming to sell as much as $5.5 billion of the debt sitting on their books, the Bloomberg report said, citing people familiar with the matter. In November, Reuters also reported that Musk's political ascendancy and proximity to President Donald Trump had banks pondering over the improved prospects of the social media platform, helping them selling the debt without having to take a massive loss on the deal. Morgan Stanley and others, such as Bank of America BAC.N and Barclays BARC.L, lent Musk money in 2022 to complete his $44 billion buyout of X, then known as Twitter. Banks typically sell such loans to investors soon after a deal is done, but lenders have faced difficulties in offloading the debt in the case of X. Capitalize on high interest rates: Best current CD rates Morgan Stanley did not immediately respond to Reuters' request for comment. Reporting by Jaiveer Singh Shekhawat in Bengaluru; Editing by Alan Barona
Yahoo
04-02-2025
- Business
- Yahoo
Morgan Stanley to increase sale of loans tied to Musk's X, Bloomberg News reports
(Reuters) - A group of Morgan Stanley-led (MS) banks is set to increase a sale of loans tied to Elon Musk's social media platform X after receiving stronger-than-expected demand from investors, Bloomberg News reported on Tuesday. The banks had initially planned to sell about $3 billion worth of loans, Reuters reported last month. However, they are now aiming to sell as much as $5.5 billion of the debt sitting on their books, the Bloomberg report said, citing people familiar with the matter. In November, Reuters also reported that Musk's political ascendancy and proximity to President Donald Trump had banks pondering over the improved prospects of the social media platform, helping them selling the debt without having to take a massive loss on the deal. Morgan Stanley and others, such as Bank of America and Barclays, lent Musk money in 2022 to complete his $44 billion buyout of X, then known as Twitter. Banks typically sell such loans to investors soon after a deal is done, but lenders have faced difficulties in offloading the debt in the case of X. Morgan Stanley did not immediately respond to Reuters' request for comment.
