4 ms·

Sounds great, but who pays for it? The purchase of Twitter was done via loans and now, interest rates are not zero. Musk will have to service considerable debt

Sounds great, but who pays for it? The purchase of Twitter was done via loans and now, interest rates are not zero. Musk will have to service considerable debt to keep Twitter alive. If he can pull this off, he'll go down in history as one of the must successful business person of his generation. If he fails, he will still has Paypal, SpaceX and Tesla to brag about.

ClumsyPilot 4y ago
if it fails it cements him as a loose canon who is now past him prime
- SkipperCat 4y ago
  It will cast a narrative of Musk as someone who is successful only in a low interest rate economy. When interest rates tighten, companies have to show they can deliver more than Treasury notes. That was really easy when the interest rates were close to zero.
adam_arthur 4y ago
Presumably Twitter will be immediately profitable after these layoffs. Enough to cover the interest on the debt? Not sure
- SkipperCat 4y ago
  That maybe takes care of debt servicing, but what about growth? Business exist to grow shareholder value (public or private). Elon needs to solve that puzzle.
  - adam_arthur 4y ago
    If 50m people pay the 8 dollar a month fee that’s another decent chunk of change. Will be interesting to see how all these rapid fire changes play out over the next few years. I’m not sure the path to growth for Twitter depends on a lot of net new development. More so better monetization of the existing platform, which can largely be done via small tweaks here and there
HWR_14 4y ago
> he purchase of Twitter was done via loans and now, interest rates are not zero. Musk will have to service considerable debt to keep Twitter alive. Those loan rates were negotiated before the recent hikes. They had some range built in based on what the market did, but he is definitely paying below current market rates.

4 ms·

Sounds great, but who pays for it? The purchase of Twitter was done via loans and now, interest rates are not zero. Musk will have to service considerable debt

by SkipperCat 4y ago

ClumsyPilot 4y ago
if it fails it cements him as a loose canon who is now past him prime
- SkipperCat 4y ago
  It will cast a narrative of Musk as someone who is successful only in a low interest rate economy. When interest rates tighten, companies have to show they can deliver more than Treasury notes. That was really easy when the interest rates were close to zero.
adam_arthur 4y ago
Presumably Twitter will be immediately profitable after these layoffs. Enough to cover the interest on the debt? Not sure
- SkipperCat 4y ago
  That maybe takes care of debt servicing, but what about growth? Business exist to grow shareholder value (public or private). Elon needs to solve that puzzle.
  - adam_arthur 4y ago
    If 50m people pay the 8 dollar a month fee that’s another decent chunk of change. Will be interesting to see how all these rapid fire changes play out over the next few years. I’m not sure the path to growth for Twitter depends on a lot of net new development. More so better monetization of the existing platform, which can largely be done via small tweaks here and there
HWR_14 4y ago
> he purchase of Twitter was done via loans and now, interest rates are not zero. Musk will have to service considerable debt to keep Twitter alive. Those loan rates were negotiated before the recent hikes. They had some range built in based on what the market did, but he is definitely paying below current market rates.