Twitter burned bankers see silver lining in Musk startups

Twitter burned bankers see silver lining in Musk startups

Twitter burned bankers see silver lining in Musk startupsJuly 14 (Reuters) - Major Wall Street investment banks that will lose lucrative fees from Elon Musk abandoning $ 44 billion acquisition of Twitter Inc hope startups backed by the richest person in the world can remedy the lost cause.

Musk has been a major Wall Street client, having distributed nearly $ 500 million in commissions to investment banks such as Goldman Sachs Group Inc and Morgan Stanley since 2000, primarily for work on Tesla Inc, according to a Refinitiv estimate.

This estimate does not include the private startups of Musk, SpaceX, Neuralink and The Boring Company. Bankers said these companies have paid tens of millions of dollars in investment banking income over the years for their capital increases.

The bankers, who spoke to Musk about their business prospects provided they were not identified, said they would pursue some of these opportunities, including roles in any IPOs these companies may pursue in the future. Goldman Sachs and Morgan Stanley did not immediately respond to a request for comment.

Twitter financial advisers Goldman Sachs and JPMorgan Chase would receive fees totaling $133 million, according to an earlier filing.

Refinitiv estimates that Morgan Stanley and other financial advisers will earn more than $55 million advising Musk, while banks providing financing for the acquisition would receive between $150 million and $200 million.

This isn't the first time bankers have been let down by Musk in a takeover. He also scrapped plans to take Tesla private for $72 billion in 2018 after publicly announcing he had "secured the financing." SpaceX was recently valued at a staggering $ 125 billion, making it one of the most highly regarded private companies in the world. According to bankers and IPO lawyers, it should go public with a significantly higher valuation.

SpaceX did not immediately respond to a request for comment.

Of course, there is no guarantee that banks will lose costs. This is because Twitter is suing Musk in a Delaware court to force him to close the deal.

Related news
Zillow's home-buying experience has fallen apart, but investors think it could work in Europe
Zillow's home-buying experience has fallen apart, but investors think it could work in Europe
Venture capitalists are betting that a new breed of startups can disrupt the slow (and expensive) process of buying and selling real estate in Europe. It comes just months after US real estate site Zillow shut down its own algorithm-based house flipping service after posting losses of nearly $880 million.
The US economy contracted in the second quarter, but the underlying data showed no recession.
The US economy contracted in the second quarter, but the underlying data showed no recession.
economy contracted at a more moderate pace than initially thought in the second quarter as consumer spending blunted some of the drag from a slower pace of inventory accumulation, dispelling fears that a recession was underway
Falling gasoline prices are giving Americans a little break, but how far will they actually go?
Falling gasoline prices are giving Americans a little break, but how far will they actually go?
Citibank predicts that the price of oil could drop to $ 65 a barrel by the end of 2022 and drop to $ 45 a barrel by the end of 2023 in the event of a recession, Bloomberg reported.
McDonald's sees revenue drop during war in Ukraine as sales rise amid higher prices
McDonald's sees revenue drop during war in Ukraine as sales rise amid higher prices
In its second-quarter earnings report released on Tuesday, McDonald's admitted that its revenue fell 3% in the last quarter due to the war in Ukraine and subsequent restaurant closures in Russia. At the same time, McDonald's saw its global sales increase by almost 10%.
The policy of the United States towards North Korea has not changed despite recent nuclear remarks which have garnered attention.
The policy of the United States towards North Korea has not changed despite recent nuclear remarks which have garnered attention.
The United States said on Friday its policy towards North Korea had not changed after a senior U