3 ms·

Can Elon Musk Make the Math Work on Owning Twitter? It’s Dicey

1 points by SkyMarshal 4y ago

SkyMarshal 4y ago
Good explanation of the financial challenges of making Twitter break even, much less profitable. non-paywalled: https://archive.ph/WY3ET https://archive.ph/WY3ET TLDR (from electoral-vote.com's summary [1]): "Twitter has lost money in 8 of the last 10 years. Last year, it had a cash flow of a little over $600 million to cover all of its expenses, including $50 million in debt service. Now, with all the debt Musk took on in order to buy the platform, debt servicing alone is going to exceed $1 billion annually. That means all of the cash that the platform is generating plus another $400 million, and that's before a single server or bit of bandwidth or salary is paid for. "If that were not enough, Musk just cashiered the senior management of Twitter, naming himself as the sole director of the company. The folks he just terminated all had giant golden parachutes, meaning that he is going to have to write them nearly $200 million in checks as they exit stage right. Maybe they'll be open to taking that in Tesla stock?" [1]:https://electoral-vote.com/#item-3 https://electoral-vote.com/#item-3
m348e912 4y ago
Musk on the path to drastically cutting operational costs but he needs to generate a ton of additional revenue, fast, in order to dig himself out of the debt trap he's in. I don't know if restoring banned/shadow-banned accounts get's him there. Maybe bot mitigation helps but it has the nasty side-effect or drastically dropping user-engagement numbers. Granted they were all fake, but advertisers may not care as much as you think, instead they see the bottom line of "reach" falling off the cliff. Edit: I forgot that Musk wants to charge $20/m for twitter users to be blue checkmark verified. Notable figures like Stephen King have already stated they're not interested in paying a monthly fee, and instead he should be paid to be on the platform.

3 ms·

Can Elon Musk Make the Math Work on Owning Twitter? It’s Dicey

1 points by SkyMarshal 4y ago

SkyMarshal 4y ago
Good explanation of the financial challenges of making Twitter break even, much less profitable. non-paywalled: https://archive.ph/WY3ET https://archive.ph/WY3ET TLDR (from electoral-vote.com's summary [1]): "Twitter has lost money in 8 of the last 10 years. Last year, it had a cash flow of a little over $600 million to cover all of its expenses, including $50 million in debt service. Now, with all the debt Musk took on in order to buy the platform, debt servicing alone is going to exceed $1 billion annually. That means all of the cash that the platform is generating plus another $400 million, and that's before a single server or bit of bandwidth or salary is paid for. "If that were not enough, Musk just cashiered the senior management of Twitter, naming himself as the sole director of the company. The folks he just terminated all had giant golden parachutes, meaning that he is going to have to write them nearly $200 million in checks as they exit stage right. Maybe they'll be open to taking that in Tesla stock?" [1]:https://electoral-vote.com/#item-3 https://electoral-vote.com/#item-3
m348e912 4y ago
Musk on the path to drastically cutting operational costs but he needs to generate a ton of additional revenue, fast, in order to dig himself out of the debt trap he's in. I don't know if restoring banned/shadow-banned accounts get's him there. Maybe bot mitigation helps but it has the nasty side-effect or drastically dropping user-engagement numbers. Granted they were all fake, but advertisers may not care as much as you think, instead they see the bottom line of "reach" falling off the cliff. Edit: I forgot that Musk wants to charge $20/m for twitter users to be blue checkmark verified. Notable figures like Stephen King have already stated they're not interested in paying a monthly fee, and instead he should be paid to be on the platform.