October 2022·Intermediate
In short
Elon Musk bought Twitter for $44 billion in October 2022. He funded it with his own shares, equity from co-investors, and about $13 billion of debt. The banks that lent against Twitter could not sell that debt on, and sat on billions in losses.
Musk made an unsolicited offer for Twitter, then tried to walk away citing bot-account concerns. Twitter sued to force the deal to close, and Musk completed it in October 2022 at $54.20 per share. It is a textbook leveraged buyout, with a messy public backstory.
About $27 billion came from Musk (cash plus his existing Twitter shares and margin loans against Tesla stock), around $7 billion as rolled equity from co-investors, and roughly $13 billion as debt secured by Twitter itself.
Morgan Stanley led a group including Bank of America, Barclays, MUFG, Societe Generale, and BNP. They committed the debt up front, planning to sell it to investors (syndicate) later.
By the time the deal closed, credit markets had worsened and Twitter's earnings were weak. The banks could not offload the debt at full price and ended up holding it at a loss, with reported mark-to-market losses of several billion across the group.
Much of it was sold at a discount over 2023 and 2024. As X's cash flows improved, it became easier to service and sell the remaining paper.
When banks fund committed debt for a buyout and markets move against them, they carry the risk. This is the core of leveraged finance and bridge-to-bond risk.
Investment Banking
Leveraged Finance and M&A desks built this deal. It spans bridge loans, high-yield bonds, and take-private advisory.
Private Equity
The LBO blueprint: debt capacity, financing windows, and exit math. This deal shows what happens when the window closes.
Sales & Trading
When debt cannot be syndicated, credit traders hold the risk on their books and mark it to market.
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