Wall Street: Why the banks won't ditch Musk

The latest in finance.
View in browser


Morning, Michelle Abrego here from a sunny New York City! 

Who might not be seeing much daylight right now? Those hammering out the details for Elon Musk's $44 billion buyout of Twitter. Apparently, the deal hinges on a number of banks providing billions in debt financing. 

But before we get into that, I just want to flag that we have plenty of non-Musk-related news for you, too, from a look at hedge fund Millennium's recruiting push to how finance bros are brushing up on their etiquette

Let's dive in!

If this was forwarded to you, sign up here. Download Insider's app here.

Elon Musk attends The 2022 Met Gala Celebrating

1. Elon's $44 million deal for Twitter currently hangs on whether banks will put up $13 billion in debt financing. 

Musk told Twitter on Monday he would agree to purchase the company for $54.30 per share, the terms originally set in April before he backed out. But true to form, he's introduced a caveat. The billionaire's lawyers said Musk would do the deal on its original terms "pending receipt of the proceeds of the debt financing," which was not a contingency in the original deal.

And well, there's been a lot of ink spilled about the terrible position banks are now in thanks to something they agreed to back before rising rates and a sputtering economy.

Sure, they're likely to lose millions of dollars because they will be forced to sell the debt at a discount. But they knew what they were getting into: from Twitter's lack of free cash flow to Musk's eccentricities. It would be difficult to get out of at this point. The roster of banks including Morgan Stanley and Bank of America are, in a sense, backing the potential of Musk's other enterprises, including a possible SpaceX IPO.

"The real value is the relationship with Elon Musk," Angelo Zino, senior industry analyst at CFRA, told Insider. "There's going to be a lot of people out there fighting for a potential SpaceX IPO at some point. That'll be one of the most anticipated IPOs coming to the market in the next few years." 

Read Carter Johnson's, Hayley Cuccinello's, and Kaja Whitehouse's full breakdown of why these banks may still stand to make a killing.

In other news:

izzy Israel Englander2. Elon Musk's superpower has been staying ahead of the curve. The world's richest man — whose wealth is mostly tied to Tesla's stock price — now has to survive a potential stock-market collapse and global economic downturn. Here's why his bad timing on Tesla and Twitter could cost him everything

3. Billionaire Izzy Englander's Millennium has been on a global hiring spree. Top priority is bulking up its engineering talent in key tech hubs. A top recruiter at the $57 billion hedge fund broke down the hiring process for engineers and what it takes to stand out.

4. Combining a startup with a banking behemoth is no easy task. OpenInvest's cofounders opened up about its JPMorgan deal and shared three key lessons on how to "maintain that special sauce" inside a large organization.

5. Tiger Global is still looking for $6 billion. Bloomberg reports Chase Coleman's fund is seeking more money for its next venture fund, even after writing down the value of its private portfolio.

6. Sit straight! Etiquette could make all the difference in landing a job on Wall Street. That's according to a 27-year-old who has been coaching aspiring bankers on how to impress during interviews. 

7. Louisiana pulled its money from BlackRock. The state's treasurer said he's pulling $794 million of state money from the money managers' funds, claiming its "blatantly anti-fossil fuel policies would destroy Louisiana's economy." He's not the only Republican taking aim at Larry Fink's firm or ESG.

8. Vista Equity Partners is exploring a deal to take the residential real-estate brokerage Compass private, according to sources. Compass' stock price has plunged more than 85% since the company went public last year.

9. Crypto exchanges are copying broker-dealers' playbooks. Binance, the world's biggest crypto exchange, has gained momentum after cutting fees  — a trend that took stock and investing platforms by storm a few years ago. In other Binance news, hackers have stolen at least $100 million in tokens from the crypto exchange.

10. The next owner of this spot will have a place in Hampton's history — well until another mega-mansion sells. Take a look inside this $150 million beach house. 

Keep updated with the latest business news throughout your day by checking out The Refresh from Insider, a dynamic audio news brief. Listen here.

Edited by Jeffrey Cane (tweet @jeffrey_cane) in New York and Hallam Bullock (tweet @hallam_bullock) in London. 


Key phrases

Older messages

Nobel laureate Paul Krugman warns the Fed risks going too far in fighting inflation - and predicts a return to rock-bottom interest rates

Thursday, October 6, 2022

The renowned economist noted that rate hikes have a delayed effect, and the US labor market is showing signs of cooling down. View in browser Business Insider Business Insider Business Insider

Wall Street: Musk-Twitter saga winners and losers

Thursday, October 6, 2022

The latest in finance. View in browser INSIDER INSIDER Subscribe 10 THINGS ON WALL STREET Hi! This is Dan DeFrancesco checking in from New York. For those who observed the high holy day yesterday,

Amazon reportedly freezes hiring for the corporate wing of its global retail business

Wednesday, October 5, 2022

Numerous major companies have begun initiating hiring freezes and layoffs to reduce their workforce. View in browser Business Insider Business Insider Business Insider Subscribe Hello! We're saying

Insider's new daily newsletter is coming your way

Wednesday, October 5, 2022

Only fascinating stories — right in your inbox. INSIDER INSIDER Hi there! Insider is about to launch a new daily newsletter and we wanted you to be the first to hear about it. We know you're

Wall Street: Dalio exits Bridgewater

Wednesday, October 5, 2022

The latest in finance. View in browser INSIDER INSIDER Subscribe 10 THINGS ON WALL STREET Good morning! This is Kaja Whitehouse reporting to you from New York City. The focus of today's newsletter

The bubbles shrink

Friday, December 9, 2022

Bloomberg Evening Briefing View in browser Bloomberg When it comes to bringing down inflation, the US Federal Reserve is like an A380 pilot on approach in a tricky crosswind, the runway fence lined

📊 This is how Howard Marks is investing

Thursday, December 8, 2022

Exxon announced plans to up spending on oil and gas | Cities drove twenty-first-century growth | TOGETHER WITH Hi Reader, here's what you need to know for December 9th in 3:13 minutes. 🎬 All good

How to fall off a cruise ship and live

Thursday, December 8, 2022

Plus: Work from Bali, and Brittney Griner released. View in browser Subscribe Only fascinating stories Nicholas Carlson, December 8, 2022 Hello, Insiders. Our investigations team spent months and

Wall Street: Taylor Swift shakes off FTX

Thursday, December 8, 2022

The latest in finance. View in browser INSIDER INSIDER Subscribe 10 THINGS ON WALL STREET Hiya! Dan DeFrancesco in NYC, but mentally I'm in the premium suites at Jimmy Buffett's Margaritaville

[New post] Do larger bond trades cost more to execute?

Thursday, December 8, 2022

BankUnderground posted: " Gábor Pintér Are larger trades more or less expensive to execute in bond markets than smaller trades? This is an old and unsettled question in the literature on financial

FinTech Weekly Issue #393 - Business Partnerships & Inclusivity

Thursday, December 8, 2022

Issue #393 - Business Partnerships & Inclusivity 2022-12-08 The past week was full of news in the fintech sector. New partnerships, new services, emerging markets and higher investments can make

🇨🇳 Here’s why China pivoted

Wednesday, December 7, 2022

China finally relaxed its Covid restrictions | Vale is breaking out its base metals business | TOGETHER WITH Hi Reader, here's what you need to know for December 8th in 3:03 minutes. 💸 Beyoncé x

Upending elections

Wednesday, December 7, 2022

Bloomberg Evening Briefing View in browser Bloomberg The US Supreme Court appeared split during oral arguments over a case that could fundamentally alter federal elections. The case, Moore v Harper,

Take two, with fixed links: ⛅ What About 2022 Was Hopeful?

Wednesday, December 7, 2022

Plus, a new case for reparations, WTF FTX, & a reminder to put a little respect on your cal. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

Portfolio Not Doing So Well? Maybe Take Social Security Instead

Wednesday, December 7, 2022

Also: Stocks Often Rally in December — Here's What Investors Can Expect Now ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌