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Comment by DoesntMatter22 | Hacker News Reader

Definitely not going bankrupt though people would be happy to see it.

Advertisers have come back and the staff is muuuuch smaller than before.

I think you need to avoid taking Musk’s word at face value and instead look at his actions. Avoiding paying rent and severance is not what a financially healthy company does.

The only logical reason I can think of to not pay something you know you’re legally obligated to pay is if you’re intending to declare bankruptcy to avoid paying. Otherwise you’re going to end up paying and pay a load of legal fees on top.

I guess one alternative is effectively taking a risky loan: you are running low on cash but you have a large cash flow coming in the future. Stop paying rent, eventually after a protracted court battle pay your debts with that future cash flow and the legal fees are “interest”.

Neither feels like the actions of a financially healthy company.

I don't agree with this. IMHO his career has almost been defined by an extraordinary ability to 'temporarily get away with shit'. For example, the current FSD story: I expect this will be a long, drawn-out, forgone conclusion where Tesla will eventually lose the battle by having to pay back owners but will win the war in having a cheap, easy loan from the most financially unstable years until now.

Other examples:

- Illegal firings of non-US Twitter staff

- Pushing back the Twitter acquisition

- Roadster/Truck deposits

- Radar will-they/won't-they

The ability to stop paying bills without seeing the inside of a cell or having to sleep in the cold is a powerful negotiation tool. Some won't even have the means to sue him. Despite being painted as failures, none of these will have a materially adverse affect on his life. Consequences are different for a person like him.

Judging by the quality of ads that are being presented on twitter these days (when I see any at all), this is very obviously not true, no matter how much Elon claims otherwise.

Have to agree with this. The ads I see now are for the kind of things temporary mall kiosks sell. Hard to believe they are raking in ad dollars from those.

Twitter still has to pay severance for the staff they fired - plus arbitration fees, damages, etc.

And other lawsuits will be coming in soon now that they got rid of their content moderation staff.

He needs 1b a year just to service the debt.

Didn't he create that debt mostly by the acquisition?

Yes. Leveraged buyouts usually end in default/bankruptcy. Hence the OP referring to bankruptcy as the "endgame". It was the expected outcome from the start.

Why would bankers agree to loan the money then? They get their year end bonus for originating the fee and don't care about the losses? Or do they think they can eventually get their money back by selling it to someone else?

Well, for starters, they collect those massive interest payments each year. They also saddle the companies with expensive, long-term consulting contracts which extract even more money. And if/when the company goes bankrupt, the courts often give financiers an equity slice of the new post-bankruptcy company.

The idea is usually to slash close enough to the bone that the company survives, but 100% of profits go to debt servicing. But this doesn't make for a company that's resilient to economic turmoil (or one that can invest money into growth). So the contingency plan is to ensure that they are first in line in court.

> Advertisers have come back

Which advertisers, for what price?

We will never know the true revenue of Twitter because it is no longer a traded company nor are they in any obligation to publish data of this kind publicly.

Which major advertisers are coming back?

https://www.reuters.com/technology/amazon-restart-advertisin...

Big names not sure about spend

A lot of that staff he got rid of were exactly people necessary to run large ads sales operation.

Twitter's accounts payable is telling a different story.

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