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> Chief Twit Musk, fresh from sacking the company's C-suite, clearing out the board and threatening mass layoffs, must now double Twitter's annual revenue just
by dragontamer 4y ago
> Chief Twit Musk, fresh from sacking the company's C-suite, clearing out the board and threatening mass layoffs, must now double Twitter's annual revenue just to cover interest on the debt that financed his acquisition.
Twitter's revenue is $5 billion-ish. The new interest payments are estimated to be $1.3 Billion/year IIRC (~10%, as a large chunk of it was fixed in April 2022, when interest rates were better). Hardly a "double the revenue" situation. So that already stands out to me as a rather problematic start to the article.
That being said, the rest of the point of the article seems correct to me. But its incredibly important to get a good grips on the scale of the problem here.
Elon now needs to deal with a ~$1.3 billion/year interest on top of all the other costs of Twitter, in a rising interest-rate environment. I don't think $8 / month over even millions of users will get there (and I'm not sure if Twitter will get millions of users to subscribe to the model).
- bdcravens 4y ago> Twitter's revenue is $5 billion-ish. The new interest payments are estimated to be $1.3 Billion/year IIRC Most quarters Twitter operates at a loss. 2021 its profit was less than $1B.
- dragontamer 4y agoI agree. But words like "Revenue", "Operating Profit (loss)" and "Net Profit (loss)" have meanings. Looking at the 2021 10-k statement, I don't know what number has to "double" to cover the estimated new loans (and besides, no one seems to have reported on the details of these new loans either. Even the $1.3 billion/year estimate I put forward is just a round-assumption of 10%ish payments). ------- That paragraph there is... complete nonsense. I think its fair of me to point it out. https://d18rn0p25nwr6d.cloudfront.net/CIK-0001418091/947c0c34-ca90-4099-b328-a6062adf110f.pdf https://d18rn0p25nwr6d.cloudfront.net/CIK-0001418091/947c0c3...