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Looks like he's sprinting towards the endgame of bankruptcy: https://www.nytimes.com/2022/12/13/technology/elon-musk-twitter-shakeup.html https://www.nytimes.co

Looks like he's sprinting towards the endgame of bankruptcy: https://www.nytimes.com/2022/12/13/technology/elon-musk-twitter-shakeup.html https://www.nytimes.com/2022/12/13/technology/elon-musk-twit...

DoesntMatter22 4y ago
Definitely not going bankrupt though people would be happy to see it. Advertisers have come back and the staff is muuuuch smaller than before.
- throwaway4736 4y ago
  - DoesntMatter22 4y ago
    Just google Apple and other advertisers coming back. Don't be hater/loser.
- watwut 4y ago
  A lot of that staff he got rid of were exactly people necessary to run large ads sales operation.
- rideontime 4y ago
  Judging by the quality of ads that are being presented on twitter these days (when I see any at all), this is very obviously not true, no matter how much Elon claims otherwise.
  - BobbyJo 4y ago
    Have to agree with this. The ads I see now are for the kind of things temporary mall kiosks sell. Hard to believe they are raking in ad dollars from those.
- makestuff 4y ago
  He needs 1b a year just to service the debt.
  - consp 4y ago
    Didn't he create that debt mostly by the acquisition?
    - mywittyname 4y ago
      Yes. Leveraged buyouts usually end in default/bankruptcy. Hence the OP referring to bankruptcy as the "endgame". It was the expected outcome from the start.
      - makestuff 4y ago
        Why would bankers agree to loan the money then? They get their year end bonus for originating the fee and don't care about the losses? Or do they think they can eventually get their money back by selling it to someone else?
        mywittyname 4y ago
        Well, for starters, they collect those massive interest payments each year. They also saddle the companies with expensive, long-term consulting contracts which extract even more money. And if/when the company goes bankrupt, the courts often give financiers an equity slice of the new post-bankruptcy company. The idea is usually to slash close enough to the bone that the company survives, but 100% of profits go to debt servicing. But this doesn't make for a company that's resilient to economic turmoil (or one that can invest money into growth). So the contingency plan is to ensure that they are first in line in court.
- Blackthorn 4y ago
  Twitter's accounts payable is telling a different story.
- par 4y ago
  Which major advertisers are coming back?
  - throw_nbvc1234 4y ago
    https://www.reuters.com/technology/amazon-restart-advertising-twitter-platfomer-reporter-2022-12-04/ https://www.reuters.com/technology/amazon-restart-advertisin... Big names not sure about spend
  - deleted 4y ago
    [deleted]
- afavour 4y ago
  I think you need to avoid taking Musk’s word at face value and instead look at his actions. Avoiding paying rent and severance is not what a financially healthy company does. The only logical reason I can think of to not pay something you know you’re legally obligated to pay is if you’re intending to declare bankruptcy to avoid paying. Otherwise you’re going to end up paying and pay a load of legal fees on top. I guess one alternative is effectively taking a risky loan: you are running low on cash but you have a large cash flow coming in the future. Stop paying rent, eventually after a protracted court battle pay your debts with that future cash flow and the legal fees are “interest”. Neither feels like the actions of a financially healthy company.
  - devnullbrain 4y ago
    I don't agree with this. IMHO his career has almost been defined by an extraordinary ability to 'temporarily get away with shit'. For example, the current FSD story: I expect this will be a long, drawn-out, forgone conclusion where Tesla will eventually lose the battle by having to pay back owners but will win the war in having a cheap, easy loan from the most financially unstable years until now. Other examples: - Illegal firings of non-US Twitter staff - Pushing back the Twitter acquisition - Roadster/Truck deposits - Radar will-they/won't-they The ability to stop paying bills without seeing the inside of a cell or having to sleep in the cold is a powerful negotiation tool. Some won't even have the means to sue him. Despite being painted as failures, none of these will have a materially adverse affect on his life. Consequences are different for a person like him.
- Cthulhu_ 4y ago
  Twitter still has to pay severance for the staff they fired - plus arbitration fees, damages, etc. And other lawsuits will be coming in soon now that they got rid of their content moderation staff.
- PartiallyTyped 4y ago
  > Advertisers have come back Which advertisers, for what price? We will never know the true revenue of Twitter because it is no longer a traded company nor are they in any obligation to publish data of this kind publicly.
mywittyname 4y ago
I'm guessing bankruptcy has always been the plan, but I never really understood why his financial backers would knowingly light a pile of money on fire. For oppressive governments, it seems easier to monitor & block activity on one major social media platform, rather than quashing twitter and dealing with the dozens of platforms that rise from the ashes. Maybe it's a megalomaniac dictator thing, and I will never understand.
- coldpie 4y ago
  > I never really understood why his financial backers would knowingly light a pile of money on fire Think about FTX, cryptocurrencies, Juicero... it's becoming pretty overwhelmingly clear that having money is not in any way correlated to being able to spend it intelligently. It's time to start seriously thinking about wealth caps.
- Sebb767 4y ago
  > I'm guessing bankruptcy has always been the plan Why? What advantage would that bring to him? Honest question. With him overpaying for Twitter already (maybe not completely voluntary), bankruptcy looks like the fastest way to make the deal even worse.
  - sprkwd 4y ago
    Won't have to pay a Billion Dollars a year in interest.
    - Sebb767 4y ago
      How so? Either those loans are attached to Twitter (as I think they are), in which case his investment going to zero is still the worst thing that can happen, or they are attached to his wealth directly, in which case he will need to pay either way.
  - mywittyname 4y ago
    > Why? It doesn't take a financial wizard to realize that Twitter was insolvent from the day it was purchased. Saddling a company with an interest payment that's nearly double revenue is a clear indication to me that the time period from purchase-to-bankruptcy was going to be measured in months. So we can be pretty confident that everyone involved with this purchase was expecting Twitter to die quickly. You and I are on the same page. But the "why" is not "why would they make such a poor financial choice," since it's clear the answer to that is "to kill Twitter." The why is really, "why bother killing Twitter?" I get Musk's reasoning, but I don't understand what his co-investors get out of the deal. Authoritarian regimes benefit from having dissidents operate on a centralized platform, because it's easier to monitor. Killing twitter pushes these groups out to platforms that are going to be decentralized and impossible to block. It's weakening their grip, not reinforcing it. My best guess is that they assumed that Musk would stay on post bankruptcy and act as their pro-authoritarian sock puppet. But they didn't anticipate his complete ineptitude would drive users off the platform in such numbers.
wpietri 4y ago
Honestly, I doubt it. Bankruptcy puts him under the very direct supervision of the kind of federal judge that does not fuck around. And network-effects businesses like Twitter can do pretty well even when being neglected. I think he might continue to use the spectre of bankruptcy to scare his staff; he clearly likes rule through fear to create a false sense of urgency. That leaves him with people who will do whatever he wants no matter what it means for Twitter's users or society at large, two things Twitter's previous workforce cared about.
deleted 4y ago
[deleted]

DoesntMatter22 4y ago

Definitely not going bankrupt though people would be happy to see it. Advertisers have come back and the staff is muuuuch smaller than before.

throwaway4736 4y ago
- DoesntMatter22 4y ago
  Just google Apple and other advertisers coming back. Don't be hater/loser.
watwut 4y ago
A lot of that staff he got rid of were exactly people necessary to run large ads sales operation.
rideontime 4y ago
Judging by the quality of ads that are being presented on twitter these days (when I see any at all), this is very obviously not true, no matter how much Elon claims otherwise.
- BobbyJo 4y ago
  Have to agree with this. The ads I see now are for the kind of things temporary mall kiosks sell. Hard to believe they are raking in ad dollars from those.
makestuff 4y ago
He needs 1b a year just to service the debt.
- consp 4y ago
  Didn't he create that debt mostly by the acquisition?
  - mywittyname 4y ago
    Yes. Leveraged buyouts usually end in default/bankruptcy. Hence the OP referring to bankruptcy as the "endgame". It was the expected outcome from the start.
    - makestuff 4y ago
      Why would bankers agree to loan the money then? They get their year end bonus for originating the fee and don't care about the losses? Or do they think they can eventually get their money back by selling it to someone else?
      - mywittyname 4y ago
        Well, for starters, they collect those massive interest payments each year. They also saddle the companies with expensive, long-term consulting contracts which extract even more money. And if/when the company goes bankrupt, the courts often give financiers an equity slice of the new post-bankruptcy company. The idea is usually to slash close enough to the bone that the company survives, but 100% of profits go to debt servicing. But this doesn't make for a company that's resilient to economic turmoil (or one that can invest money into growth). So the contingency plan is to ensure that they are first in line in court.
Blackthorn 4y ago
Twitter's accounts payable is telling a different story.
par 4y ago
Which major advertisers are coming back?
- throw_nbvc1234 4y ago
  https://www.reuters.com/technology/amazon-restart-advertising-twitter-platfomer-reporter-2022-12-04/ https://www.reuters.com/technology/amazon-restart-advertisin... Big names not sure about spend
- deleted 4y ago
  [deleted]
afavour 4y ago
I think you need to avoid taking Musk’s word at face value and instead look at his actions. Avoiding paying rent and severance is not what a financially healthy company does. The only logical reason I can think of to not pay something you know you’re legally obligated to pay is if you’re intending to declare bankruptcy to avoid paying. Otherwise you’re going to end up paying and pay a load of legal fees on top. I guess one alternative is effectively taking a risky loan: you are running low on cash but you have a large cash flow coming in the future. Stop paying rent, eventually after a protracted court battle pay your debts with that future cash flow and the legal fees are “interest”. Neither feels like the actions of a financially healthy company.
- devnullbrain 4y ago
  I don't agree with this. IMHO his career has almost been defined by an extraordinary ability to 'temporarily get away with shit'. For example, the current FSD story: I expect this will be a long, drawn-out, forgone conclusion where Tesla will eventually lose the battle by having to pay back owners but will win the war in having a cheap, easy loan from the most financially unstable years until now. Other examples: - Illegal firings of non-US Twitter staff - Pushing back the Twitter acquisition - Roadster/Truck deposits - Radar will-they/won't-they The ability to stop paying bills without seeing the inside of a cell or having to sleep in the cold is a powerful negotiation tool. Some won't even have the means to sue him. Despite being painted as failures, none of these will have a materially adverse affect on his life. Consequences are different for a person like him.
Cthulhu_ 4y ago
Twitter still has to pay severance for the staff they fired - plus arbitration fees, damages, etc. And other lawsuits will be coming in soon now that they got rid of their content moderation staff.
PartiallyTyped 4y ago
> Advertisers have come back Which advertisers, for what price? We will never know the true revenue of Twitter because it is no longer a traded company nor are they in any obligation to publish data of this kind publicly.

mywittyname 4y ago

I'm guessing bankruptcy has always been the plan, but I never really understood why his financial backers would knowingly light a pile of money on fire. For oppressive governments, it seems easier to monitor & block activity on one major social media platform, rather than quashing twitter and dealing with the dozens of platforms that rise from the ashes. Maybe it's a megalomaniac dictator thing, and I will never understand.

coldpie 4y ago
> I never really understood why his financial backers would knowingly light a pile of money on fire Think about FTX, cryptocurrencies, Juicero... it's becoming pretty overwhelmingly clear that having money is not in any way correlated to being able to spend it intelligently. It's time to start seriously thinking about wealth caps.
Sebb767 4y ago
> I'm guessing bankruptcy has always been the plan Why? What advantage would that bring to him? Honest question. With him overpaying for Twitter already (maybe not completely voluntary), bankruptcy looks like the fastest way to make the deal even worse.
- sprkwd 4y ago
  Won't have to pay a Billion Dollars a year in interest.
  - Sebb767 4y ago
    How so? Either those loans are attached to Twitter (as I think they are), in which case his investment going to zero is still the worst thing that can happen, or they are attached to his wealth directly, in which case he will need to pay either way.
- mywittyname 4y ago
  > Why? It doesn't take a financial wizard to realize that Twitter was insolvent from the day it was purchased. Saddling a company with an interest payment that's nearly double revenue is a clear indication to me that the time period from purchase-to-bankruptcy was going to be measured in months. So we can be pretty confident that everyone involved with this purchase was expecting Twitter to die quickly. You and I are on the same page. But the "why" is not "why would they make such a poor financial choice," since it's clear the answer to that is "to kill Twitter." The why is really, "why bother killing Twitter?" I get Musk's reasoning, but I don't understand what his co-investors get out of the deal. Authoritarian regimes benefit from having dissidents operate on a centralized platform, because it's easier to monitor. Killing twitter pushes these groups out to platforms that are going to be decentralized and impossible to block. It's weakening their grip, not reinforcing it. My best guess is that they assumed that Musk would stay on post bankruptcy and act as their pro-authoritarian sock puppet. But they didn't anticipate his complete ineptitude would drive users off the platform in such numbers.

wpietri 4y ago

Honestly, I doubt it. Bankruptcy puts him under the very direct supervision of the kind of federal judge that does not fuck around. And network-effects businesses like Twitter can do pretty well even when being neglected. I think he might continue to use the spectre of bankruptcy to scare his staff; he clearly likes rule through fear to create a false sense of urgency. That leaves him with people who will do whatever he wants no matter what it means for Twitter's users or society at large, two things Twitter's previous workforce cared about.

deleted 4y ago

[deleted]