Morgan Stanley Was Counting on $150 Million in Twitter Deal Fees

When Morgan Stanley first worked on Elon Musk’s $44 billion Twitter acquisition in April 2022, bankers estimated fees on the deal could reach $150 million or more, according to two people who saw the terms. But that wasn’t the only payoff the bank saw from its involvement in the deal: Morgan Stanley also hoped to strengthen its existing relationship with Elon Musk, whose empire of companies offers the potential for more deal work.

Instead, the deal has turned into something of a dud for the bank. It hasn’t earned all the fees Morgan Stanley was counting on. And like the collective of other banks that loaned Musk a total of $13 billion to buy Twitter, Morgan Stanley has been stuck holding onto the loans it made, unable to sell them off because Twitter’s decline has reduced the debt’s value. The bank is the lead lender and has been stuck with $3.5 billion in debt, affecting its ability to make other loans, although it has earned interest income on the debt that likely totals hundreds of millions annually.