Morgan Stanley CEO James Gorman defends Elon Musk amid layoffs and chaos at Twitter - and says he's not concerned about the bank's massive loan to the Tesla exec
- Morgan Stanley's James Gorman defended Elon Musk amid Twitter chaos on Thursday.
- The bank led the $12.5 billion debt financing for Musk to acquire the social media company.
Morgan Stanley's chief executive James Gorman defended Elon Musk in an interview Thursday, about a month into the Tesla exec's tenure as CEO of the social media firm.
"Twitter is a great company, and Elon Musk is an extraordinary executive. Very few people create global businesses that are transformative in industries," Gorman said at a Reuter's conference on Thursday, citing Musk's other ventures like SpaceX, Tesla, and The Boring Company.
Morgan Stanley was the lead bank on the massive $12.5 billion debt financing to facilitate Musk's takeover of Twitter, which closed at the end of October. But as equity and debt markets weather intense volatility, many of the traditional buyers of risky debt have pulled back. According to reports in early October, the banks backing Musk's takeover were already facing steep losses as they struggled to offload the debt to other investors.
Since Musk's takeover on October 27, there has been a mass exodus of Twitter employees. Top execs and rank-and-file staff were either laid off, fired, or quit shortly after he took over. Musk revealed that advertisers were pausing spending on the platform, which lead to a "massive drop in revenue."
"Regarding Twitter's reduction in force, unfortunately there is no choice when the company is losing over $4M/day. Everyone exited was offered 3 months of severance, which is 50% more than legally required," Musk tweeted on Nov. 4.
Gorman is not concerned about about the bank's loan to Musk, however. Musk's experience running successful and "innovative" companies across electric vehicle, space exploration, and infrastructure industries speaks for itself.
"Institutions like ours are not stupid. We don't get behind that kind of business and that kind of opportunity unless it's real. And it's very real," Gorman said. "He's probably, you know, along with Steve Jobs and Bill Gates and one or two others, the most interesting entrepreneur of the last 50 years."
He added: "I wouldn't bet against Elon Musk. Who would not want to do business with a person who has that kind of capability?"
Even before the takeover, Musk was known for his active Twitter presence, and his tweets have frequently moved the price of individual stocks and cryptocurrencies.
On November 28, Musk tweeted a photo of four cans of caffeine-free diet coke, two guns, and a painting of George Washington, with the caption "My bedside table." He also tweeted — and hours later deleted — a link to a homophobic conspiracy theory surrounding the attack of former Democratic House Speaker Nancy Pelosi's husband on Oct. 30.
Gorman says he's unbothered by Musk's social media presence.
"My job is not to manage everybody's personal life. My job is to run Morgan Stanley. Some people wear ties, and some people don't," he said. "We all have different ways of going about our business."