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Twitter now has billions in debt that it has to service and has lost half of their top 100 advertisers. Their plan to sell an 8$ subscription won't have the rea

by i13e 4y ago

Twitter now has billions in debt that it has to service and has lost half of their top 100 advertisers. Their plan to sell an 8$ subscription won't have the reach or ability to service that debt, and while layoffs were necessary to cut costs, doing it in such a classless and unorganized way opens them to serious site reliability issues going forward (they were even down a bit today, for example). I don't see this playing out well to be honest.

smoldesu 4y ago
Frankly, that was going to happen either way. Twitter was losing money long before Elon took over, and advertising alone was never going to pay the bills for ~7500 employees.
- i13e 4y ago
  Yes but the issue is that while laying off so many people could have reduced their burn to zero, losing half of your top 100 advertisers AND adding billions in debt, plus losing most of your staff is a recipe for disaster. Sorry if I didn't phrase that well in my comment. I do agree that they would have collapsed eventually and this is just an accelerated version of that
  - smoldesu 4y ago
    Guess we'll have to see, then. I'm no fan of the guy, but from where I'm standing the board seems stacked in Musk's favor...
    - HPMOR 4y ago
      How? Please explain. Literally everything is going against him right now.
      - jhgfjhfgjhfgjh 4y ago
        Twitter reduced headcount significantly and the service is operating like normal. How is that going against him?
        dragon-hn 4y ago
        Are they shipping more or less features that can grow the business? We obviously don’t know either way, but no massive outages so far doesn’t mean Twitter is still operating smoothly.
        mwint 4y ago
        Twitter hadn't been shipping a whole lot of features to grow the business while it was a public company. The baseline is pretty low.
  - dahdum 4y ago
    I’m not an Elon fan boy, but he didn’t really “lose” those advertisers. Most just paused their spend due to the uncertainty, possible public backlash, and the downturn. If he turns Twitter into what he’s shooting for, they’ll be back and more will follow. I think it’s like 50/50 if he succeeds or not, but I’m not at all confident Twitter’s chances are any worse than they were. They are definitely trending up the longer it goes along. Of course I may be biased. The man did buy my small amount of a dogshit stock at a huge premium, removing it from my index investments. Twitter wasn’t going to see $54 again for a very long time, if ever.
- justbored123 4y ago
- snowwrestler 4y ago
  Why wasn’t advertising going to pay the bills for 7,500 employees? Ads pay the bills for Meta and Google, which each have way more than 7,500 employees.
  - mcrib 4y ago
    They've had a decade plus to figure out advertising and haven't been able to. Meta and Google figured it out right away.
- 542458 4y ago
  Twitter was profitable! They made a profit in 2018 and 2019 and would have been profitable in 2021 were it not for a one-time legal settlement. Or if you prefer to do it by quarters, they’ve been profitable for 16 of the last 20 quarters. Twitter’s main problem wasn’t that it wasn’t profitable, it’s that growth was slower than ideal and they had been unsuccessful at diversification. Now with Twitter facing a new $1.2B per year in debt, servicing hitting profitability again will be a challenge.

by i13e 4y ago

smoldesu 4y ago

Frankly, that was going to happen either way. Twitter was losing money long before Elon took over, and advertising alone was never going to pay the bills for ~7500 employees.

i13e 4y ago
Yes but the issue is that while laying off so many people could have reduced their burn to zero, losing half of your top 100 advertisers AND adding billions in debt, plus losing most of your staff is a recipe for disaster. Sorry if I didn't phrase that well in my comment. I do agree that they would have collapsed eventually and this is just an accelerated version of that
- smoldesu 4y ago
  Guess we'll have to see, then. I'm no fan of the guy, but from where I'm standing the board seems stacked in Musk's favor...
  - HPMOR 4y ago
    How? Please explain. Literally everything is going against him right now.
    - jhgfjhfgjhfgjh 4y ago
      Twitter reduced headcount significantly and the service is operating like normal. How is that going against him?
      - dragon-hn 4y ago
        Are they shipping more or less features that can grow the business? We obviously don’t know either way, but no massive outages so far doesn’t mean Twitter is still operating smoothly.
        mwint 4y ago
        Twitter hadn't been shipping a whole lot of features to grow the business while it was a public company. The baseline is pretty low.
- dahdum 4y ago
  I’m not an Elon fan boy, but he didn’t really “lose” those advertisers. Most just paused their spend due to the uncertainty, possible public backlash, and the downturn. If he turns Twitter into what he’s shooting for, they’ll be back and more will follow. I think it’s like 50/50 if he succeeds or not, but I’m not at all confident Twitter’s chances are any worse than they were. They are definitely trending up the longer it goes along. Of course I may be biased. The man did buy my small amount of a dogshit stock at a huge premium, removing it from my index investments. Twitter wasn’t going to see $54 again for a very long time, if ever.
justbored123 4y ago
snowwrestler 4y ago
Why wasn’t advertising going to pay the bills for 7,500 employees? Ads pay the bills for Meta and Google, which each have way more than 7,500 employees.
- mcrib 4y ago
  They've had a decade plus to figure out advertising and haven't been able to. Meta and Google figured it out right away.
542458 4y ago
Twitter was profitable! They made a profit in 2018 and 2019 and would have been profitable in 2021 were it not for a one-time legal settlement. Or if you prefer to do it by quarters, they’ve been profitable for 16 of the last 20 quarters. Twitter’s main problem wasn’t that it wasn’t profitable, it’s that growth was slower than ideal and they had been unsuccessful at diversification. Now with Twitter facing a new $1.2B per year in debt, servicing hitting profitability again will be a challenge.