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Wall Street banks prepare to sell up to $3B in X loans next week
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Re: Wall Street banks prepare to sell up to $3B in X loans next week
#72Whatever. I think X has been Musk's most spectacularly succesful investment.
44 billion was a pretty small price to pay for the ultimate propaganda bullhorn.
Re: Wall Street banks prepare to sell up to $3B in X loans next week
#73I'm skeptical about Elon Musk being the richest person on the planet. My mantra these days? 'Show me the money!' If Wall Street banks are preparing to sell $3B in X loans, maybe he should buy them back—with real cash this time.
Who cares if he's the richest? Why should he show this to you? How do you know that he should buy these loans as opposed to this being a normal process working out the same as it always does?
Maybe you should collapse the number of items you have an interest in formulating an opinion on so that you can give more attention to those things that you can provide something that adds to the discussion.
Re: Wall Street banks prepare to sell up to $3B in X loans next week
#74Earlier quoted context omitted.
They’re saying that the debt is structured with layers (tranches), where the top layers have added protections and get paid back first if there’s trouble, while the “subordinated” layers sit below them in priority. “Extra levels of credit protection” means the tranches being sold to investors have features (e.g., senior ranking, collateral, covenants) that reduce default risk. Banks typically retain the subordinated…
Having flashbacks of The Big Short.
Ever since the first copper merchant took inventory risk senior and junior tranches have existed.
Re: Wall Street banks prepare to sell up to $3B in X loans next week
#75Whatever. I think X has been Musk's most spectacularly succesful investment. 44 billion was a pretty small price to pay for the ultimate propaganda bullhorn.
He has failed in his fiduciary duty to other investors. If your goal is to build a propaganda bullhorn as opposed to maximizing returns for your investors then don't take money from other investors or at least warn them.
Re: Wall Street banks prepare to sell up to $3B in X loans next week
#76I wonder who's going to be buying, since they're selling at just a 5% discount. Since the purchase, Twitter has lost 85% to 90% of its revenues. So, I think the discount doesn't factor in just how much value X has lost. And, unless Musk buys back the debt, I don't see any takers lining up. Judging by how much stock Elon had to sell, plus the loans/equity raised for the initial purchase, it feels like an all-round bad…
Does the value of a company matter for their bonds? As I understand it, Twitter is breaking even given all expenses, which means that they should not have problems paying back their debt. In which case, the investment seems solid. If we were talking stocks, I would understand it.
Debt is short a put. The shareholders can walk away from a default and you are stuck with whatever the company is worth. So the more enterprise value vs the debt, the safer.
Re: Wall Street banks prepare to sell up to $3B in X loans next week
#77Earlier quoted context omitted.
They’re saying that the debt is structured with layers (tranches), where the top layers have added protections and get paid back first if there’s trouble, while the “subordinated” layers sit below them in priority. “Extra levels of credit protection” means the tranches being sold to investors have features (e.g., senior ranking, collateral, covenants) that reduce default risk. Banks typically retain the subordinated…
Having flashbacks of The Big Short.
The problem in The Big Short was that lenders bundled many loans with correlated risk and advertised the resulting bundle as less risky. Because of the demand for these bundles they issued and bundled increasingly risky loans as time went on. Eventually when the market corrected all of these loans defaulted at the same time.
Re: Wall Street banks prepare to sell up to $3B in X loans next week
#78Am I thinking right but say the coupon is 9,6. And now they are selling it at 10% loss. But they got this coupon for 2 years over say ~4 of more safe loans. They are not even now losing too much and certainly not at 5?
Maybe they are just rebalancing not-too-well-rated or prospective assets for safety reasons.
Re: Wall Street banks prepare to sell up to $3B in X loans next week
#79Earlier quoted context omitted.
"$34B is a steep price to kill Twitter, but maybe it's worth it", a somebody wrote back in the day. Apparently it sort of was worth it for Musk, but it cost him, and is going to cost further down the line.
He bought himself into the White House as a tech-bro Rasputin, probably the most paid for that level of influence, so we can expect him to get his money's worth.
He has made many times his money back in the value rise in Tesla and SpaceX.
Re: Wall Street banks prepare to sell up to $3B in X loans next week
#80I wonder who's going to be buying, since they're selling at just a 5% discount. Since the purchase, Twitter has lost 85% to 90% of its revenues. So, I think the discount doesn't factor in just how much value X has lost. And, unless Musk buys back the debt, I don't see any takers lining up. Judging by how much stock Elon had to sell, plus the loans/equity raised for the initial purchase, it feels like an all-round bad…
> Twitter has lost 85% to 90% of its revenues. Do you mean from when Musk purchased it? https://www.businessofapps.com/data/twitter-statistics/ Looking at the revenue growth, does anyone know why it increased in value to the degree it did leading up to its sale? I recall there was some discussion around the amount of bots (not the existence, the degree). Pre-sale: https://www.pewresearch.org/internet/2018/04/09/bots-…
I don't understand to what extent bots impacted Twitter's revenue or if at all that happened, after all, that only came up as one of a few tactics Elon tried using to get out of buying Twitter.
Thing is, as a public company, Twitter's revenues were public, amounting to $5.229B/yr (i.e., up to the sale). And, the New York Times reported they were doing $114M/quarter in early 2024. Annualized, that's $456M per year. So, an 87% revenue decline if we compare X's self-reported revenues against Twitter's last public disclosures before being acquired.