5 ms·
Last I read, Twitter has about 2 years of runway in the bank (based on the loan repayment costs). They will be forced to deal with bankruptcy eventually, there
by zamalek 4y ago
Last I read, Twitter has about 2 years of runway in the bank (based on the loan repayment costs). They will be forced to deal with bankruptcy eventually, there is little chance of anyone scaling it to what is required to pay the interest on the loan. As of right now/short-term, though, it is financially safe.
To make matters worse, Musk has not financially scaled it in the direction it needs to go in order to pay the interest once the runway runs out. Revenue is currently trending downwards, mostly due to scaring off advertisers (who were basically solely shouldering the cost of keeping Twitter afloat). It seems that he doesn't understand that he needs to scale revenue upwards, never mind the historically steep gradient of growth required.
The odds of the banks shutting it down are slim, they do ultimately want to recoup their costs. I imagine that they'll out Elon when they have the legal tools to do so, and replace him with someone who at least understands that "LESS PROFIT BAD, MORE PROFIT GOOD, ME NOT PISS OFF IMPORTANT CUSTOMER."
- qup 4y ago> It seems that he doesn't understand that he needs to scale revenue upwards This is exactly the kind of attack that I find so...interesting. You think Elon Musk, of PayPal, SpaceX, Tesla, and many more, doesn't know that a business has to make money? > someone who at least understands that "LESS PROFIT BAD, MORE PROFIT GOOD, ME NOT PISS OFF IMPORTANT CUSTOMER." Yeah, you really believe it. You even said it like a caveman to illustrate how fundamentally simple the concept is, but you still have the opinion that the richest man on the planet who has founded many successful companies doesn't understand caveman logic. It's baffling. Here's one totally made up scenario that can explain it: Elon Musk buys twitter, has his lackeys run a financial analysis, and they decided they need to do XYZ things to make it profitable, which will harm short-term revenues to the tune of higher long-term revenues. I made that up just now, believe it or not. You can try it too. You can invent many more plausible situations than "Elon Musk is dumber than a caveman." You're not inside Twitter, or inside Musk's brain, to have any idea why he's doing what he's doing. But "RICH GUY DUMB, ME SMARTER!" is the conclusion, I guess.
- boopboopbadoop 4y agoUh, I think it was a joke.
- zamalek 4y ago> You think Elon Musk, of PayPal, SpaceX, Tesla, and many more, doesn't know that a business has to make money? The problem with this argument is that there is no certain attribution, except in the case of Twitter. The only property of his where we are certain that it is him making the decisions is Twitter. Musk has some extremely talented individuals under his employment at his other properties. And to be clear, the only thing he has ever founded is SpaceX. Musk's comments in the past few months have shown exactly how intelligent he is. He is nothing more than a rich kid, who made some good investments, and then claimed the work of his employees as his own. The man purchased the company stock at a meme price.
- qup 4y ago> Musk has some extremely talented individuals under his employment at his other properties. Generally speaking, that's what I consider being a good CEO. > And to be clear, the only thing he has ever founded is SpaceX I didn't use the term founded, but this is a silly argument. I don't really care about it, though. We can ignore the bulk of his wealth and limit him to SpaceX and it leaves him looking...well, really impressive. SpaceX is fucking awesome, they're doing badass work.
- RedditKon 4y agoHow are you calculating the 2 years of runway? Last I heard they have $1B in cash on hand and are doing roughly $3B/year in revenue. Musk has reportedly gotten their annual expenses down to $3B with another $1.5B in annual debt servicing costs. By my math that's less than a year of runway.
- zamalek 4y agoAs I said, last I read - that was at the outset of this fiasco. So much has changed in so few months.