Elon Musk’s acquisition of Twitter has turned into a significant financial burden for banks involved, marking the worst merger-finance deal since the 2008-09 financial crisis.

– **Background:** In 2022, Musk secured approximately $13 billion in loans from seven banks, including Bank of America and Morgan Stanley, to take Twitter private.
– **Current Situation:** Banks typically sell takeover debt quickly but have struggled with this deal due to Twitter’s poor financial results, leaving the loans stuck on their balance sheets.
– **Decline in Value:** The loans’ value dipped post Musk’s $44 billion takeover, now estimated to be worth around $19 billion—55% less than the purchase price.
– **Impact on Investment Banks:** The inability to offload these loans has led to declines in the rankings of involved banks and significant cuts in bonuses, with Barclays reportedly slashing compensation for its M&A team by at least 40% due to poor performance driven by this deal.
– **Political and Revenue Challenges:** Under Musk’s leadership, Twitter (now X) has faced issues with advertisers, prompting lawsuits against groups accused of boycotting the platform, which have severely impacted revenue.

This situation highlights ongoing challenges for banks tied to high-risk merger finance deals, especially amid volatile market conditions.