According to a Wall Street Journal report, banks that loaned Elon Musk $13 billion to buy Twitter haven’t been able to sell the debt.

  • Darkassassin07@lemmy.ca
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    2 months ago

    It’s not money they owe, but money owed to them; backed by some form of contract. Your credit card contract for example.

    Person A owes person B money, let’s say $100. Person B sells that debt to Person C for $80.

    Person A still owes the same $100, just to a different person.

    Person B gets paid now instead of waiting for Person A to pay up, but lost $20 on the deal.

    Person C invested $80, hopefully gets paid the full $100, not having to chase down a delinquent debtor, and profits $20 out of the deal.

    Nobody wants to be person C when it comes to the Debt Twitter owes.

    If you had someone that owed you money (or anything else really), you could sell that debt, assuming you can find a buyer for it. Banks just do this on a much larger scale than $100 at a time.

    • cuerdo@lemmy.world
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      2 months ago

      Another example are collection agencies:

      • Frenchie owes Artie $50,000, but he cannot collect.
      • Tony pays Artie $6,000 to buy the debt.
      • Then Tony visits Frenchie and he gets the $50,000 with a bit of gabagool

      Free Cannoli