'Even the mighty can fall,’ says Elon Musk on UBS buying Credit Suisse for $3.25 bn

In a historic agreement, the banking giant UBS has agreed to pay $3.25 billion to acquire the crisis-hit Credit Suisse Group AG.

Responding to a tweet, Musk wrote, “Even the mighty can fall if leadership makes bad decisions. Hard to believe these days that Apple was months from bankruptcy before Jobs returned.”

Musk wrote this tweet to an internet user who wrote, “In 2006, Credit Suisse had a market cap of $70B. By 2016, they had a market cap of $30B. By 2022, they had a market cap of $10B. Today, they were acquired for $2B,” in one of his tweets.

The takeover deal, which was announced on Sunday, is intended to prevent the crisis-hit bank from starting a more significant global banking crisis. Credit Suisse is the eighth-largest investment bank in the world and the second-largest bank in Switzerland.

Previously, on March 11, Musk tweeted, “I'm open to the idea,” reverting to ”Min-Liang Tan, CEO of Razers’ suggestion that Musk should consider buying the Silicon Valley Bank after it shut down. He also suggested that he should convert the SVB into a digital bank.

The Swiss government shared that this deal, which involves Switzerland's biggest bank taking over the second-largest, was necessary to prevent this enormous economic crisis from spreading in the country and around the world.

UBS Chair Colm Kelleher said on Sunday, “It's a historic day in Switzerland, and a day frankly, we hoped, would not come,” while addressing analysts on a conference call. “I would like to make it clear that while we did not initiate discussions, we believe that this transaction is financially attractive for UBS shareholders,” he said.

Similar to UBS, Credit Suisse was one of 30 banks designated as Global Systemically Important Banks, or "too large to fail" in the eyes of the international financial system. The US has witnessed two bank collapses back-to-back bank in a week; first Silicon Valley bank, then Signature Bank.

Also Read: Deja vu! Credit Suisse's Rs 1.4 lakh cr debt wipeout reminds investors of Yes Bank's AT1 bond saga