The Elon Financial Mindfuck

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Happy Wednesday.

Welcome back to Dry Powder, my biweekly private email about what’s really happening on Wall Street. In tonight’s edition, the untold story of why Elon’s instantly underwater leveraged buyout of Twitter will require his banks to sell the company’s debt at a discount, siphon its free cash flow into interest payments, and provide distressed debt investors with an opportunity to walk away with the whole damn thing.

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The Elon Financial Mindfuck

So Elon is buying Twitter… great. Now he just needs to figure out how to prevent the banks from issuing the company’s distressed debt at a discount to loan-to-own sharks (Apollo? DoubleLine?) who can wipe him out and maybe even one day take over the company.

WILLIAM D. COHAN

Where we last left the Twitter saga, our reluctant hero Elon Musk had essentially made the difficult decision that he’d be better off forking over another $20 billion of his own cash rather than continue to fight Twitter in court and still end up paying a fine in the billions of dollars—perhaps double-digit billions—and have only a bunch of lawsuits to show for it. Let’s face it, Elon is past the point of good choices, while his banks, led by Morgan Stanley and Bank of America, are presumably rueing the day they ever got involved in this disaster of a deal...

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