Twitter-burned bankers see a silver lining in Musk’s startups

July 14 (Reuters) – Top Wall Street investment banks that stand to lose Elon Musk’s lucrative fee by dropping his $44 billion acquisition of Twitter Inc are hoping the most person-backed start-ups rich in the world will make up for lost business.

Musk is one of Wall Street’s biggest patrons, doling out nearly $500 million in fees to investment banks such as Goldman Sachs Group Inc and Morgan Stanley since 2000, mostly for work on Tesla Inc, according to a report. Refinitiv estimate.

This estimate does not include private start-ups from Musk, SpaceX, Neuralink and The Boring Company. Bankers said these companies had paid tens of millions of dollars in investment banking fee income over the years for their capital raises.

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The bankers, who spoke about their business prospects with Musk on the condition of not being identified, said they would pursue some of those opportunities, including roles in any initial public offerings those companies may pursue in the future.

Goldman Sachs and Morgan Stanley did not immediately respond to a request for comment.

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

According to Refinitiv estimates, Morgan Stanley and other financial advisers stand to earn more than $55 million advising Musk, while banks providing acquisition financing could receive between $150 million and $200 million.

This is not the first time that bankers have been disappointed with Musk during an acquisition. He also reneged on plans to take Tesla $72 billion in 2018 after publicly announcing he had “funding secured”.

SpaceX was recently valued at $125 billion, making it one of the most valuable private companies in the world. It should go public at a significantly higher valuation, according to bankers and IPO lawyers.

SpaceX did not immediately respond to a request for comment.

Of course, there is no guarantee that banks will lose out on fees. Indeed, Twitter sued Musk in a Delaware court to force him into the deal.

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Reporting by Anirban Sen in New York; Editing by Stephen Coates

Our standards: The Thomson Reuters Trust Principles.

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