Morgan Stanley (NYSE:MS)'s CEO James Gorman has ruled out any chance that the investment bank could end up owning Elon Musk’s Twitter Inc (NYSE:TWTR).
Responding to a question from Bloomberg Surveillance at the World Economic Forum in Davos, Switzerland, Gorman said there is no scenario in which the investment bank could end up owning the social media platform.
“No, we could not end up owning Twitter,” he said.
READ: Morgan Stanley trumps Goldman Sachs in the battle of the banks
Musk engaged the US investment bank to advise him during the eventful journey that led to the $44 billion purchase of the social media website and assisted in raising $25.5 billion as part of the deal, including $12.5 billion in loans secured by shares of Musk’s Tesla Inc (NASDAQ:TSLA). which have fallen sharply.
“We’re very comfortable with our position,” Gorman said.
But a report on Bloomberg has highlighted the exposure of Morgan Stanley (NYSE:MS) and other US banks to the Twitter deal.
Paper losses for the group of seven banks that backed Musk’s takeover are potentially around $4 billion, Bloomberg reported.
As Morgan Stanley led the financing it has the biggest exposure at about 27% of the debt, the report said.
When asked by Wells Fargo banking analyst Mike Mayo about the transaction on the Tuesday earnings call following their fourth-quarter results, Gorman declined to talk specifics and defended the leveraged-lending business.
“I’m not going to talk about Twitter. We don’t talk about single names as you would expect,” he said.
“The way I think about this is we run a portfolio business. We obviously have single credits at any point in time that disappoint relative to others, but it’s the total package,” Gorman added. “And the total package, if you look at it, actually turned out to be very fine given the environment we’re in.”
Contact Jeremy at jeremy@proactiveinvestors.com