Elon Musk made a $13 billion blunder. Wall Street still wants to work with him.

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Elon Musk made a $13 billion blunder. Wall Street still wants to work with him.

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$43 billion acquisition of

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has a new distinction: It was the worst banking deal since 2008.

The banks that lent Musk $13 billion are struggling to resell the debt, causing them internal problems.

And yet: Those banks would be happy to have those problems — if that helps them work on Musk’s next deal.

If you’re a person who enjoys watching Elon Musk fall on his face, you may have already seen this:

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.

Schadenfreude fans who read on will learn that the banks who lent him $13 billion to buy

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(he put up some of the remaining $30 billion himself, along with pitch-ins from the likes of Oracle founder Larry Ellison and

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) have serious lender’s remorse.

They’d like to resell the debt to someone else. But that’s very hard to do when

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’s revenue is in free-fall and

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or

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.

The problem for the lenders, including Morgan Stanley and Bank of America, is so acute it even affected some of their bankers’ bonuses. I can hear some of you munching on your popcorn as I type this.

Except: This is where the difference between

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, and just about everyone else, manifests.

For starters: Say you or I make a terrible investment and then compound it by driving down the revenue of the thing we bought by 50%. We might have a very hard time covering the interest on the debt we took on to make that terrible investment.

And that might lead to the banks taking our stuff. But Musk — again, the richest man in the world — has been making his payments, which run some $1.5 billion a year.

More important, per The

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, which first reported the story:

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.

… they are eager to be well-positioned to work with Musk and his six companies that range from electric-vehicle maker

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to Neuralink and xAI. Many view a possible initial public offering of Musk’s rocket company SpaceX or his Starlink satellite business as a fee-generating event that they don’t want to miss out on.

That is: The whole reason they lent Musk $13 billion in the first place wasn’t because they thought Musk had a great plan for

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(though some surely did). It’s that they wanted to be in the Elon Musk business.

And even now, after seeing with their own eyes how

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, they still want to be in that business.

And that has some cold hard logic to it:

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. You can debate whether that’s a “real” valuation or not, but if Musk ever does take it public, it’s going to be a giant IPO, and banks will be tripping over themselves to get a piece of it.

So laugh at Elon Musk all you want. But know that his bankers will keep telling him they’re deadly serious about backing him.

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#Elon #Musk #billion #blunder #Wall #Street #work

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