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Your number might be something other than cash flow. IIRC Twitter has net negative cash flow and about $4B in existing long term debt prior to the new debt fina
by Zigurd 4y ago
Your number might be something other than cash flow. IIRC Twitter has net negative cash flow and about $4B in existing long term debt prior to the new debt financing of the acquisition.
The debt financing burden is a further burden on Musk: twitter generates no free cash flow. Musk has to pay the creditors, and his co-investors are not likely to put in more cash. Musk and every other investor bought-in to a deal that now would be valued at about half what they paid. Depending on how the debt is secured, this also means twice the percentage of the company's value is now encumbered by that debt. That means that if Twitter were sold today the equity investors could lose nearly their entire investment.
Even a lousy LBO would be of a company you can asset-strip to reduce the debt. What could Twitter sell? The financing really does not make sense.