Wall Street banks are offloading nearly all of the $12.5 billion in debt from Elon Musk's purchase of Twitter

Wall Street has just dumped nearly every dollar of its $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, unloaded $4.74 billion of debt on Thursday, selling more than planned $3 billion, as investors submitted orders for $12 billion, according to the Financial Times report.
Creditors, including Bank of America, Barclays, and MUFG, have remained in debt since October 2022, unable to find buyers willing to take on the risk. Now they have a little over $1 billion left, which is a fraction of what they started with.
The sudden market demand for this debt can of course be attributed to President Donald Trump's return to the White House and the announcement that Elon is now the 'First Friend'. They held a joint press conference just last week, as reported by Cryptopolitan. Investors had previously considered these Twitter loans radioactive. Now they have become a golden ticket.
Elon's role in the White House turns bad debt into hot demand
Banks tried to sell the debt several times before, for example, in 2023 and early 2024, but buyers showed no interest - even at significant discounts. This changed when Trump won.
Until January 2025, Morgan Stanley managed to move $1 billion of debt to Diameter Capital Partners. In February, they sold another $5.5 billion, valuing it at 97 cents on the dollar.
The real turning point came when Elon merged his artificial intelligence startup, xAI, with X, increasing its valuation and providing an additional level of security to the debt. Suddenly, Wall Street saw potential where it had previously seen losses.
Four banks sold at full price - without discounts on Thursday. Some loans are already trading between 101 and 102 cents per dollar in the secondary market.
There is only one part left - over $1 billion of unsecured loans, the riskiest part of the deal. This debt pays higher interest, but if X collapses, these creditors will be at the back of the line for repayment, so investors are waiting to see how they will deal with it.
Technically there are two options: to sell it immediately or to refinance it with new preferred shares, according to sources close to the deal. In any case, the demand is high, and these guys know it.
Tesla shares are falling sharply as Elon divides attention
Meanwhile, Tesla investors are unhappy. Shares fell 6% on Tuesday, dropping to $328.50 - part of a five-day loss series that wiped out over $200 billion in market value.
According to JPMorgan analysts, the reason is that the Chinese automaker BYD announced a partnership with DeepSeek to develop autonomous driving technologies, and their plan is to implement self-driving features in 21 new models. This is a direct challenge to Tesla, which still requires drivers to remain at the wheel.