I think it's interesting that this is the new narrative about the state of the company. I don't recall this being a common consensus before the acquisition, but likely tied to the financial revelations made public during/after the acquisition.
The company had issues prior, but the financial blow Twitter took the day the deal closed may be impossible to recover from. These were not hidden revelations that came to light, they occurred because of the price paid. It's looking increasingly likely Twitter died the day the acquisition closed, and actions since are proverbial deck chairs.
On a personal note, Twitter feels more like Musk's personal platform now. Every single time I visit the Twitter website, the first tweet I see is Elon's. I don't follow him. Two people I follow happen to follow him. No matter how many times I select that the tweet isn't relevant, a new Elon tweet shows up. The only way to get rid of him from my timeline is to block him or unfollow everyone I follow that follows him, which seems pretty absurd.
On top of that Musk has given guidance that he expects revenue to fall from $6b in 2022 to $3b in 2023. (This seems dramatic TBH)
I don't think there were revelations (this is all public info), the transaction just changed the fundamentals.
Holy shit, that's terrible.
Can you give a source? A quick google search only shows articles about how Musk claims he prevented a 3bn shortfall through layoffs.
That is not exactly accurate, twitter has lost about a billion dollars since the ipo...
https://www.netcials.com/financial-net-profit-year-quarter-u...
I don’t have inside information but considering how the acquisition reportedly started deterring ad buys almost as soon as it was announced, it’s very easy to imagine that they were in fact losing money in November but would not have been had the deal never happened.
Operating profit and stock share price are two different things.
I think the loss of advertising revenue since (and because of) the deal is much bigger than the interest expense.
The only change after the acquisition is based on Musk’s decision to add new annual debt servicing on the order of 20% of their entire revenue and recognizing that removing moderation and welcoming extremists and sex traffickers back to the site probably isn’t the recipe for getting advertisers to significantly increase their spending.
> To cut costs, Twitter has not paid rent for its San Francisco headquarters or any of its global offices for weeks, three people close to the company said.
People who believe Musk is being hounded for ideological reasons also believe that NYT is among the culprits.
I’m quite familiar with the Elon fanboy who says “masterful move sir” when he sees Elon slam his dick in a car door. But you’re in a different category. Your response to dick destruction seems to be “nothing to see here, it’s a regular, normal activity. The mainstream media is persecuting Elon!”
Same ideological reasons as your main point.
"Twitter now allows stuff i disagree with, so them being in financial trouble is good, because stuff i disagree is bad". Where as your post forces them to think through how is it that twitter is in financial trouble all the sudden, but not before, and whether that is an accurate representation of reality versus a narrative to appeal to the aforementioned bias. People go out of their way to avoid cognitive dissonance, so downvote.
Sometimes it isn’t a grand mainstream media conspiracy.
The amusing part is that this narrative is ultimately getting checked by reality - with each passing month of the company not immediately failing as per the media hysterics, people will have to face that uncomfortable cognitive dissonance.
Agenda you say? You look at any business and see that they took on massive amount of debt, and said debt did not go to improve their bottom line. And calling that “financial issues” is an agenda now?
It's pretty clear the borrower didn't know what they're doing when they made this deal. The borrower even tried to get the deal canceled (or maybe just renegotiate) by going through the court, and failed.
The lenders moved forward because they know the borrower is good for it. And the borrower can afford to lose even more billions and still function. The borrower can afford to make mistakes of this size.
I think you're confusing "this has been allowed to continue" with "all parties know what they're doing".
Mergers where the loading of debt onto the company to finance the merger is a major cause of bankruptcy also aren’t that unusual. (For both public firms and firms taken private.)
There have been structural issues related profitability literally since around 2012, which is not something that relates to capital structure.
If you want to have any chance of being objective, you will include the cost-cutting that was done as well, which did improve the bottom line. At any rate, it will be very interesting to revisit all these threads a year from now. My bet is it will work out fine, but we'll see soon enough, right?
And all of that was because Musk (lamely) threatened to increase free speech on the platform. They don't like that, the media.