Musk’s purchase of Twitter is poised to be the worst leveraged buyout for banks post-2008 crisis, harming Tesla shareholders significantly due to its high debt burden.
The $44 billion deal relied on $13 billion in debt financing from banks, limiting investment banks' ability to fund new deals as they struggle to offload this debt.
Since the deal closed, investment banks have faced the longest period ever of not being able to offload LBO debt since Lehman Brothers, currently at nearly two years.
Musk's reassurances to bankers indicate ongoing struggles with the Twitter finances, as the expectations of over $1 billion annual interest proves unsustainable given the revenue challenges.
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