Sponsored by Carlyle Commodities

Musk's X Financing Talks Stall

A consortium of seven lenders led by Morgan Stanley (NYSE: MS) is left with a $12.5 billion debt from Elon Musk’s $44 billion takeover of Twitter, now known as X, according to a recent report from Bloomberg.

Conversations between the banks and Musk’s team, which occurred earlier in the year but “faltered” according to the outlet, were aimed at restructuring the debt to ease the financial burden and mitigate risk for the banks involved. The initiative sought to lower the debt’s cost and secure a safer investment framework for the lenders.

The consortium has held the sizeable debt since 2022. They have collectively decided against selling their debt individually, opting instead for a joint sale when X demonstrates a more robust economic performance. This strategy hinges on anticipated improvements in advertising revenue, subscription numbers, and the success of a forthcoming peer-to-peer payment system. As to when that will be — well, it is all still unclear.

You can read more on the matter here.

What’s going on?

• AI Predicted To Widen Income Inequality, IMF Paper Says (theDeepDive)

• Ukraine says it has sunk a Russian patrol ship near Crimea (Reuters)

• Documents Reveal Trudeau Shut Down An Investigation Into COVID-19 Lab Research Breach (theDeepDive)'

• Jeff Bezos Surpasses Elon Musk as World’s Richest Person (WSJ)

• China Sets Economic Growth Target To ‘Around 5%’, Boosts Military Budget By 7.2% (theDeepDive)

• Fake websites for real companies are scamming Canadian consumers and businesses (CBC)

• Noem Gives Updates On Massively Ambitious, Possibly Unrealistic The Line Project (theDeepDive)

• Toronto home sales up in February from last year as consumers eye rate cuts (BNN)

• Ukrainian Firm Works To Scam Canadians, Uses Fake Endorsements From Trudeau (theDeepDive)

• Meta's Facebook, Instagram down for hundreds of thousands of users across globe (CNBC)

• Colombia Warms Up To Coca Leaf… As Fertilizers (theDeepDive)

What’s the latest?

• Apple's China Problem: Apple's iPhone sales in China dropped 24% year-on-year in the first six weeks of 2024, facing tough competition from domestic rival Huawei, which saw a 64% increase in unit sales, according to Counterpoint. This decline could signal a demand slowdown for Apple, whose revenue forecast for the current quarter is $6 billion below Wall Street expectations. To counteract this, Apple has started subsidizing some iPhone models by up to 1,300 yuan ($180.68).

• AI Frenzy: Singapore's Temasek Holdings is in talks to invest in Microsoft-backed AI company OpenAI, known for its ChatGPT. Senior executives from Temasek have met with OpenAI's CEO, Sam Altman, multiple times in recent months. Initially, Temasek was interested in investing in Altman's venture capital fund, Hydrazine Capital, but discussions have shifted to include the AI non-profit. This potential investment comes after reports that Altman is seeking to raise between $5 trillion and $7 trillion for a network of AI chip factories. The interest in AI has surged, with AI startups in the United States attracting one out of every three investment dollars last year

• Tether: Tether's dollar-pegged stablecoin, USDT, has surpassed $100 billion in circulation as bitcoin's price reaches a record high, driving demand for cryptocurrencies. In the past 24 hours, approximately $122.5 billion worth of USDT has been traded.

• Bitcoin: Bitcoin reached a new record high of $69,202, surpassing its previous peak of $68,999.99 from November 2021. The surge was driven by investments in U.S. spot exchange-traded crypto products and anticipation of falling global interest rates. Since the Securities and Exchange Commission approved 11 spot bitcoin ETFs in late January, investor interest has soared. Bitcoin has experienced a remarkable increase of nearly 160% since October, with 44% of the rise occurring in February alone.

• Bank of Canada: Analysts expect the Bank of Canada to raise its estimate of the neutral interest rate, a key indicator for future interest rates, by 25 basis points to a range of 2.25%-3.25% with a midpoint of 2.75% during an economic update on April 10. This potential increase suggests that borrowing costs may not decrease as significantly as in past easing cycles, which could impact heavily indebted Canadians accustomed to low borrowing rates.

8 billion pounds of nickel potential

The stock market and stuff

• Marathon Digital Adds 15 Million Shares To Compensation Package For Management (theDeepDive)

• Bitcoin Surges to Record Above $69,000 on Sustained ETF Demand (Bloomberg)

• Tesla shares slip 5% after suspected arson attack halts production at Berlin gigafactory (CNBC)

• How Shein’s US IPO Became Endangered by China Rift (Bloomberg)

• Amer Sports losses narrow as China sales fuel holiday-quarter revenue growth (CNBC)

In the juniors

• Lithium Chile Farms Out Four Chile Properties, Exploration Spend Projected To Hit US$20 Million (theDeepDive)

• Quoin stock craters 47% on public offering after rallying in prior session (SA)

• Global Atomic Reports After-Tax NPV (8%) Of $917 Million For Dasa Project (theDeepDive)

FULL DISCLOSURE: Carlyle Commodities is a client of Canacom Group, the parent company of The Deep Dive. Canacom Group is currently long the equity of Carlyle Commodities. The author has been compensated to cover Carlyle Commodities on The Deep Dive, with The Deep Dive having full editorial control. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security.