Elon Musk’s acquisition of Twitter, now known as X, represents the worst merger financing deal for banks since the 2008 financial crisis, as reported by The Wall Street Journal.

Key points include:
– **Loan Details**: Seven banks, including Bank of America and Morgan Stanley, loaned Musk approximately $13 billion to acquire Twitter in 2022.
– **Debt Issues**: Typically, banks sell takeover debt quickly; however, they have been unable to do so with Twitter’s loans due to the company’s poor financial performance, resulting in the debt remaining on their balance sheets.
– **Loan Value Decline**: Since Musk’s $44 billion takeover, the loan values have plummeted, and they are now in “historic territory” of underperformance.
– **Comparative Performance**: According to PitchBook LCD, the Twitter loans have remained unsold longer than any similar deal since the 2008 crisis.
– **Financial Markdowns**: Although banks received significant interest payments, many have marked down loan values by hundreds of millions.
– **Company Valuation**: In October, X’s valuation fell to about $19 billion—55% lower than Musk’s purchase price.
– **Impact on Banks**: The issues surrounding the Twitter loans have affected banks’ standings in investment rankings and have led to significant compensation cuts for top bankers at Barclays and others, with some facing reductions of at least 40%.

Musk’s tumultuous relationship with advertisers and ongoing legal disputes further exacerbate the financial struggles of X, making this deal a significant burden for the involved banks.