The world’s richest person is testing Wall Street’s limits

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Elon Musk has been a mixed blessing for Wall Street. His mega-financing deals have generated lucrative investment-banking fees while reshaping global market dynamics.

There are plenty of examples. SpaceX’s $US75 billion ($107.8 billion) listing in June soaked up so much liquidity that it may have delayed the initial public offerings of Anthropic PBC and OpenAI. Now, the window for blockbuster IPOs appears to be closing.

Then there was Musk’s 2022 acquisition of social media platform Twitter. Banks were stuck for years with $US13 billion of debt used to finance the deal, weighing on their balance sheets and souring the mood for leveraged-finance transactions. The timing was brutal. Borrowing costs jumped soon after Musk finalised his financing package, as the Federal Reserve delivered 525 basis points of hikes in just 16 months.

Which raises the........

© The Age