Wall Street banks offload nearly all $12.5B in debt from Elon Musk’s Twitter buyout

Wall Street just dumped nearly every dollar of the $12.5 billion in loans that helped Elon Musk buy Twitter—now called X—in 2022. A group of seven major banks, led by Morgan Stanley, offloaded $4.74 billion of the debt on Thursday, selling more than their planned $3 billion as investors flooded in with $12 billion in orders, according to a report from the Financial Times.

The lenders, including Bank of America, Barclays, and MUFG, had been stuck with the debt since October 2022, unable to find buyers willing to take on the risk. Now they’re left holding just over $1 billion, a fraction of what they started with.

The market’s sudden appetite for this debt can of course be credited to president Donald Trump’s return to the White House, and announcing that Elon is now “First Buddy.” They held a press conference together just last week, as was reported by Cryptopolitan. Investors once saw these Twitter loans as radioactive. Now, they’re a golden ticket.

Elon’s White House role turns bad debt into hot demand

Banks tried selling the debt many times before, like in 2023 and early 2024, but buyers weren’t biting—not even at steep discounts. That changed the moment Trump won.

By January 2025, Morgan Stanley managed to move $1 billion of the debt to Diameter Capital Partners. By February, they sold another $5.5 billion, pricing it at 97 cents on the dollar.

The real game-changer though is Elon folded his artificial intelligence startup, xAI, into X, boosting its valuation and giving the debt some extra level of security. Suddenly, Wall Street saw potential where it once saw losses.

By Thursday’s sale, the banks got full price—no discounts. Some of the loans are already trading between 101 and 102 cents on the dollar in the secondary market.

There’s one piece left—more than $1 billion in unsecured loans, the riskiest portion of the deal. This debt pays higher interest, but if X collapses, these lenders are at the back of the line for repayment, and so investors are waiting to see how they will handle it.

Technically, there are two options: sell it outright or refinance it with new preferred equity, according to sources close to the deal. Either way, demand is high, and these guys know it.

Tesla stock plunges as Elon splits focus

Meanwhile, Tesla investors aren’t happy. Shares dropped 6% on Tuesday, falling to $328.50—part of a five-day losing streak that wiped out over $200 billion in market value.

The reason, according to JPMorgan analysts, is Chinese automaker BYD announced a partnership with DeepSeek to develop autonomous vehicle tech, and their plan is to roll out self-driving features in 21 new models. That’s a direct challenge to Tesla, which still requires drivers to stay behind the wheel.

Analysts at Morgan Stanley see the competition heating up. “Waymo, BYD, and Tesla are all fighting for dominance in robotaxis,” they wrote in a note to clients on Friday. They still have a $430 price target on Tesla but warn that rising competition could hit margins.

Elon’s attention is all over the place. He’s not just running Tesla, SpaceX, X, and xAI—he’s also pushing to buy OpenAI and spending more time in Washington, D.C.. Trump has tapped him to lead the Department of Government Efficiency (DOGE), a new White House initiative to cut spending, slash regulations, and even shut down entire agencies.

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