The seven major banks who lined up to finance Elon Musk’s purchase of Twitter in 2022 are still on the hook for $13 billion, setting unpaid debt records not seen since the 2008 Great Recession collapse. Let that sink in!

When news broke in July that Twitter/X was moving out of its SF headquarters and shutting down its SF offices, owner Elon Musk bizarrely claimed the move was prompted by California loosening some laws regarding trans youth in public schools. It now seems perhaps more important that the company may be experiencing some historic financial losses.

You’ll recall Musk paid $44 billion to acquire Twitter in October 2022, and immediately began losing users and advertisers. Changing the name of the platform to “X” was probably not a shrewd branding move, and it did not help that Musk publicly admitted to on-the-job drug use while making infantile sex jokes with the business’s name. Musk also told fleeing advertisers to “Go fuck [them]selves” last year, and then recently sued some of them for refusing to advertise on the site. So maybe not the steadiest hand at the wheel here.

But Musk did not pay the full $44 billion price tag himself. Around $30 billion was from Musk and personal investors, another $14 billion was from investment banks. These investments banks still pretty much have not been paid back, and the Wall Street Journal now reports that the Musk Twitter deal is the worst merger-finance deal for banks since the financial collapse of 2008.

When banks make these loans, they actually quickly try to sell them off to another lender, therefore decreasing their exposure. But when the banks cannot sell the loans, they are considered “hung loans.”

The Journal reports that “According to data from PitchBook LCD, the Twitter loans have been hung longer than every similar unsold deal since the 2008-09 financial crisis for which the research firm has complete records.” The chart below shows just how much longer the banks have had the (currently) bad Elon-Twitter loans on their books, compared to other leveraged buyout deals since 2008.

And some bankers have personally lost plenty of salary, just because their bosses decided to loan money to Elon Musk.

“Barclays’s top investment bankers on the mergers and acquisitions team were told at a New York dinner early last year that compensation for everyone in the room would be cut by at least 40% from the prior year. The bank had several hung deals hurting its performance but X was by far the largest,” the Journal reports. “Once bankers were paid their bonuses for the year, about 50 of Barclays’s more than 200 managing directors left the firm.”

A report from Fidelity Investments back in January, cited by the Guardian, estimated that the value of X/Twitter had dropped by about 71% since Musk took over the company.

Yet the banking industry will gladly put up with Elon’s bullshit, as they are trying to curry favor with him for if/when his other companies SpaceX or Starlink have their IPOs. The other big banks with bad Musk-Twitter debt include Bank of America, Morgan Stanley, Mitsubishi UFJ, BNP Paribas, Société Générale, and Mizuho.

And it’s often forgotten that Musk did not want to pay $44 billion for Twitter, he just managed to back himself into a corner and was forced to. Musk first teased the hostile $44 billion takeover in April 2022, and while he enjoyed the attention, he was going wobbly on carrying through within a month — he claims because he got a better look at the financials. The deal was declared dead in July when Musk tried to back out, but Twitter shareholders sued him, and Musk got his ass handed to him in a Delaware court, forcing the sale to go through.

So this whole thing may have been an attention stunt gone wrong for Elon Musk. But it may be going more wrong for the bank lenders than for Musk at this point.

Related: Elon Musk’s Twitter/X Sues Advertisers for Not Advertising on Elon Musk’s Twitter/X [SFist]

Image: SAN FRANCISCO, CALIFORNIA - JULY 26: The outline of the iconic blue Twitter bird logo is visible on a sign in front of X headquarters on July 26, 2023 in San Francisco, California. A day after San Francisco police officers halted the dismantling of the Twitter sign at Twitter headquarters, one of the blue birds has disappeared along with three of the letters. CEO Elon Musk officially rebranded Twitter as "X" and has changed its bird logo, the biggest change he has made since taking over the social media platform. (Photo by Justin Sullivan/Getty Images)