it's wild that Musk was trolled into paying $44B to destroy a perfectly viable company.
Edited to say "mostly" not profitable.
Grade CCC bonds are well above 16% these days, and the amount of debt is $13 Billion. This very well could be $2 Billion/year interest payments.
I remember reading rumors of ~10% since the debt was signed in April 2020 and rumored to be 50% fixed and 50% adjustable. But I never actually found the real information or confirmation.
I think it's safe to say that the interest payment is somewhere between $1 and $2 billion, but there is also principal that needs to be paid back, right?
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That's not counting whatever debt Elon did to get his $33 Billion portion of the bill. I'm just looking at Twitters debt they now owe Morgan Stanley (and a few other banks) as part of the $13 Billion leveraged buyout portion of this company purchase.
https://www.nytimes.com/2022/10/30/technology/elon-musk-twit...
I don't know how Twitter spent its money, but seemingly on undifferentiated software (i.e. not durable) or moderation? Both of which are recurring expenses.
I don't think Twitter is in the same position at all
Everyone knew they had too many employees, and that big money-making possibilities... don't seem to be there, due to the nature of the niche they've carved. But they had a lot of money in the bank, so they didn't need to make any sudden movements. Sensible downsizing and incremental improvement of the bottom line, and, yeah, that's a viable business.
It may not be super exciting, but if you want exciting, head south on 101, Meta is about 40 minutes out depending on time of day.
They could turn no profit in a hundred years, and thats fine.
apparently he was into layoffs before it was cool
But calling twitter a "perfectly viable company" is part of the problem. It's comments like this that inflate the bubble. Twitter has thousands of employees who have done close to nothing for at least several years.
Facebook/meta are at least trying new things. Twitter seems to be afraid to make any decisions at all.
You people really miss the bigger picture from the business side of things - Musk now owns the most impactful social network on the planet. Having an additional $44 billion in wealth does not bring you anything that is actionable. Its just inert wealth. Only when its used, wealth actually becomes something meaningful.
And Musk bought the biggest social network on the planet with that money. At this moment, he can do anything from boosting his own projects and businesses through Twitter to creating entirely new paradigm like making Twitter into a Western Wechat.
(Im obviously not counting Facebook as a top social network at this point)
> Facebook/meta are at least trying new things
Meta is banking on something that may or may not materialize. Its a gamble. Musk is going to copy what's already successful elsewhere.
This is an extraordinary claim. Most impactful as measured by what? Twitter isn’t even in the top 10 for dau/mau.
They are almost exactly the same size as reddit in terms of active users.
> (Im obviously not counting Facebook as a top social network at this point)
That’s just being unreasonable.
It generates a lot of the agenda in certain socioeconomic segments. It disseminates a lot of information to these segments. Those segments dont overlap with Reddit. And if Musk keeps the 'free speech' thing going, it can also attract the segment that Reddit addresses.
The private equity downsize strategy is probably right--you have to get it into a leaner state to start printing money--but the execution is poor, and Musk can too easily fiddle with the wrong knob and drive away uses a la Tumblr.
I mean, it's not like Twitter had some amazing business plan going forward.