8 ms·

Twitter’s Revenue, Adjusted Earnings Fell About 40% in Month of December

81 points by donohoe 4y ago

jonathanfoster 4y ago
https://archive.is/J7l42 https://archive.is/J7l42
code_runner 4y ago
Ad based businesses are getting hit hard, which explains the desire to switch to subscription based models. It doesn’t help when someone like Elon is chasing away advertisers with so much success. With the layoffs they’ve had I wonder how net profit etc are going to shape up. Since Twitter is now private a lot of numbers and finance info is going to be just hearsay and rumors… but things almost certainly can’t be going well.
- sebzim4500 4y ago
  >but things almost certainly can’t be going well. Is that obvious? Didn't they fire way more than 40% of the workforce? Presumably that was the biggest expense, so they should be much closer to profitable now than they were before.
  - drcongo 4y ago
    The fact that they're being sued by the landlord of their offices because they can't pay the rent seems like a good indicator.
    - pavlov 4y ago
      Not just physical rents. The Information reports that Twitter is at least $70 million behind on their AWS bills: https://www.theinformation.com/articles/musk-delayed-paying-twitters-amazon-cloud-bill-sparking-ad-threat?rc=4ypc5n https://www.theinformation.com/articles/musk-delayed-paying-... Amazon is retaliating by not paying their Twitter ad bills, which seems like the kind of thing that can be effective against the Trump-Musk school of business operations.
      - DharmaPolice 4y ago
        Couldn't they just retaliate by stopping their AWS service? Isn't that what happens when you don't pay your bill?
        moron4hire 4y ago
        That's kind of like the trope of a loan shark "busting people's legs". It doesn't do any good, because then they can't work to make the money they need to pay off the loan shark.
        bawolff 4y ago
        Threats only work if you carry them out when someone calls your bluff. The loan shark is interested in making sure everyone else pays.
        interactivecode 4y ago
        just revoke their account and wipe their databases :-) like every other account that's behind on their bills
        mleo 4y ago
        There is a 5-year contract in place, so a little different than just a credit card on file that is failing to charge based on usage. Also, it was reported they aren’t using the compute power as expected in contract, so the bill may not fully relate to actual resources consumed.
      - bawolff 4y ago
        That's insane. Why isn't amazon just pulling the plug? I imagine that with 40% staff, twitter now lacks the institutional knowledge to switch providers. Seems like amazon cutting them off would be a really effective way for amazon to make sure that they get paid first.
        lapcat 4y ago
        > Seems like amazon cutting them off would be a really effective way for amazon to make sure that they get paid first. Or an effective way of killing Twitter, losing their money and a customer forever. Amazon can afford to play a patient game of tit-for-tat.
    - twelve40 4y ago
      if they went from >7000 to <2000 he might be trying to hardball renegotiate or terminate overpriced contracts to house that no longer existent army of workers that were probably put in place even before covid. Who knows since they are private, but that's what we're currently facing in SF ourselves - an empty office with a multiyear lease that nobody knows what the f to do with.
      - jeromegv 4y ago
        Sure he's trying to hardball, but he's also doing that with his Amazon bills, which can hardly be seen as a good sign.
  - JanSt 4y ago
    They also have to pay a ton of additional interest and lost a lot of revenue
  - d_e_solomon 4y ago
    From the article: > In an update to investors, Twitter reported a decline of about 40% year-over-year in both revenue and adjusted earnings for the month, the people said. If adjusted earnings are down 40% - which is a non GAAP way of measuring profit and usually more aggressive - Twitter is much further away from being profitable than it was pre-Musk.
  - code_runner 4y ago
    A lot of severance but I don’t know how/where that is accounted for in stuff like this. I assume you are correct thought and they are on that path.
- JPKab 4y ago
  How much was it him "chasing away advertisers" vs activists pushing boycotts?
  - Pxtl 4y ago
    Isn't that kind of the same thing? If you're so controversial that people successfully call to boycott you personally, is that not chasing away paying customers?
  - jeromegv 4y ago
    Does not matter how much activist push to boycott, they aren't the ones paying the bills. There's been activist calls to boycott facebooks for so many years now and it has hardly made a dent into Facebook ads spending because companies know they make a good ROI from IG and FB ads. It's a business decision if you want to keep spending your advertising dollars on Twitter, and if for whatever reason the ROI is not there anymore, then you drop your advertising budget. Why is the ROI not there anymore? You have to ask.
    - mschuster91 4y ago
      > There's been activist calls to boycott facebooks for so many years now and it has hardly made a dent into Facebook ads spending because companies know they make a good ROI from IG and FB ads. Usually because Reddit and Facebook actually act on public outrage and close down hate groups.
  - snowwrestler 4y ago
    Companies don’t care how “organic” a particular moment of public outage is. To make marketing decisions, they gauge the impact on their current and future business. If activists get public traction that will affect sales, the company will do something about it.
  - the_duke 4y ago
    The advertisers care about "brand safety", which Musk completely undermined with his verification changes and the following wave of meme accounts impersonating companies. The changes were quickly rolled back to put safeguards and new check marks in place, but by that point a lot of advertisers had already decided to freeze their spending or even stop their campaigns. The wave of un-bans also didn't help. A screenshot was circulating of an Erasmus (student exchange program) ad appearing right under the tweet of a freshly un-banned Nazi, raving against some minority group. I doubt the woke activism made a big difference.
- CyberDildonics 4y ago
  Ad based businesses are getting hit hard What are you basing this on?
  - HDThoreaun 4y ago
    Google and Meta earnings saying that cost per click is down around 15%
blitzar 4y ago
> In an update to investors, Twitter reported a decline of about 40% year-over-year in both revenue and adjusted earnings for the month, the people said. Mathematically this is difficult to believe... Unless the interest payment == the cost reductions or the interest was adjusted out of the adjusted earnings and the cost reductions == 40% etc. Someone somewhere in the long line of people from twitter to 'people familiar with the matter' are either making shit up or waving their hands in the air and grabbing the nearest number.
- gregshap 4y ago
  Yes adjusted earnings in this case is most likely something like "Adjusted EBITDA" so interest cost is adjusted out by definition, and they may also adjust out things like severance payments (if they are actually paying them).
  - blitzar 4y ago
    "Adjusted EBITDA" is what I assumed as well - no interest, no restructuring costs etc. Given revenue ~= costs at twitter the head count reduction (~80% and including all the really fat cats at the top) & reduction in expensive microservices, benefits, free meals etc has shaved only 40% off the costs.
- kasey_junk 4y ago
  Googles ad revenue fell around 10% in the same period just based on secular trends. Twitter fired their ad sales team and angered their ad partners. It seems perfectly feasible they added a 30% drop. Also investor calls are extremely easy to source because there are so many people on the call and most of them have no vested interest in keeping the numbers secret.
  - tablespoon 4y ago
    > Twitter fired their ad sales team and angered their ad partners. Which was just baffling move to me. We're not selling enough, so fire the sales team and let the product sell itself? How does that make any sense? I suppose they could have been thinking Blue check-mark sales would magically plug the hole, but that was quickly proved to be a stupid, over-optimistic idea.
causi 4y ago
I don't understand why Musk didn't wait a few months for things to settle down before raising hell at Twitter. Before he bought it people were saying "He's gonna destroy Twitter!" and then he buys it and behaves as if he intends to prove them right.
- jameskilton 4y ago
  Because to him this isn't "raising hell", this is "solving Twitter". But he's still not capable of understanding that social media is actually a far, far harder problem than cars or even rocket science. Specifically, social media does not have an end goal, like a car on the road or getting people into and back home from space safely. Social media is infinitely messy because that's what we humans are, and you can't "fix" that.
  - causi 4y ago
    Even if he was totally right he was aware that most people thought he was wrong. It's insane to make advertisers and investors think you're a lunatic whether or not you actually are when your income is dependent on those advertisers.
- DeathArrow 4y ago
  Waiting would probably meant bigger losses in time. If you want to refactor a business, better do it quick.
  - SketchySeaBeast 4y ago
    I think refactor might be the wrong term here - typically if you want to refactor something you have to know what it's doing and why it's broken. In my uninformed opinion it seems like the changes happened so fast there was no time for that initial evaluation.
- drcongo 4y ago
  My main takeaway from watching him fumble around haplessly at Twitter is that there's not a chance in hell that I'd ever get in a car built by a company that he runs like that, let alone a rocket.
biorach 4y ago
> Some of Twitter’s debt carries an annual interest rate of almost 15%. !!! Is there more information on this? How much is the principle, who are the lenders and what are the terms?
- kasey_junk 4y ago
  https://www.reuters.com/markets/us/how-will-elon-musk-pay-twitter-2022-10-07/ https://www.reuters.com/markets/us/how-will-elon-musk-pay-tw... 13B from a few big banks including Morgan Stanley. Rumor was that they were trying to sell the debt for 60c on the dollar but I don’t think that’s played out.
- ksherlock 4y ago
  https://www.wsj.com/articles/elon-musk-explores-raising-up-to-3-billion-to-pay-off-twitter-debt-11674669412 https://www.wsj.com/articles/elon-musk-explores-raising-up-t... "Twitter’s unsecured bridge loans, which total $3 billion, are the most expensive portion of the $13 billion debt package Mr. Musk incurred as part of his $44 billion acquisition of the social-media company. They carry an interest rate of 10% plus the secured overnight financing rate, a benchmark interest rate that has shot up in recent months and currently sits at 4.3%." "With every quarter that passes without Twitter refinancing the debt, the interest rate goes up by an additional 0.50 percentage point, according to regulatory filings. Twitter’s first quarterly interest payment is due at the end of the month, the filings show."
  - biorach 4y ago
    15% of 3B! ouch
tonetheman 4y ago
[dead]
kramerger 4y ago
Well, what did you except? Companies spend less money on ads in times like these. Musks childish behaviour plus instability and free speach issues made it really easy for companies to cut on their twitter ad spending first
- paul7986 4y ago
  He's Trump and a used car salesman rolled into one. I was a fan of his before I started following him in November 2022. A few weeks later I un-followed him and once again stopped using Twitter altogether.
  - justinzollars 4y ago
    [flagged]
    - delecti 4y ago
      The "Twitter Files" are total nothingburgers though. There weren't any biting revelations, just hype and poor framing.
      - justinzollars 4y ago
        [flagged]
        kramerger 4y ago
        FYI, Twitter just stopped publishing their own transparency report.
        popularrecluse 4y ago
        [flagged]
    - qsdf38100 4y ago
      What is that about?
everly 4y ago
It's interesting to consider that the company was profitable in 2018 ($1.2B) & 2019 ($1.4B) [0]. It would have also been profitable in 2021 if not for a $900 million lawsuit settlement hitting the books. It was by no means a sinking ship until the acquisition and subsequent "improvements". Perhaps they'll turn it around but there was probably a more predictable path back to profitability than the one Musk chose. [0] https://www.statista.com/statistics/274563/annual-net-income-of-twitter/ https://www.statista.com/statistics/274563/annual-net-income...
- miohtama 4y ago
  While Twitter itself is not a sinking ship, the current equity holders are. The debt cost will be ~1.5B this year. The current equity holders will be diluted thru a new funding or thru a bankruptcy liquidation, though I feel it's unlikely Elon let's it go that far.
MontyCarloHall 4y ago
Can the drop in revenue be offset by the ~80% drop in payroll? None of the prognostications about Twitter’s total and utter technical collapse after such a dramatic headcount reduction came true [0]. It still may be a bit premature even after a few months to say that the company is perfectly fine with so few engineers (e.g. can it survive a disaster recovery situation [1]?), but the platform is definitely performing far better than almost anyone predicted. [0] https://daringfireball.net/2022/12/twitter_still_up https://daringfireball.net/2022/12/twitter_still_up [1] https://twitter.com/matthew_d_green/status/1591939282947952640?lang=en https://twitter.com/matthew_d_green/status/15919392829479526...
- phphphphp 4y ago
  The site has been pretty unstable recently. The headcount cost reduction is worth much less than the additional cost of lost ad revenue + interest payments. Twitter was break even pre-Elon and is now down billions per year.
- miohtama 4y ago
  No, because Elon funded the acquisition with loan money and yearly debt payments alone jumped to 1.5B.
- par 4y ago
  > definitely performing far better than almost anyone predicted. Everytime I log in to the twitter app, the notification icon lights up, then turns off, and sometimes it lights up again with some delay. Some other times it stays lit up and doesn't turn off, even though I have no new notifications. It's gotten to the point where I no longer check the notifications because the indicator is wrong almost all the time.
- mschuster91 4y ago
  > None of the prognostications about Twitter’s total and utter technical collapse after such a dramatic headcount reduction came true [0]. There are a lot of annoying bugs that cropped up over the last months, and most of these involve features rarely used. My pet peeve is search: You have to do a search using the from-keyword like ten times or more until it actually shows results. When you scroll down for older results, you have to scroll to top and then to the bottom again because it doesn't have an "Older" button, just infinite scroll. There is no way to make the search remember you prefer recent results instead of "top" with a completely intransparent ranking. On top of that comes general instability - the app and website keeps randomly forgetting you're in the "I follow" timeline, the "for me" algorithmic timeline has sometimes hours worth of lag and is filled with crap - no I don't want to see porn someone else liked, or endless pages of replies against some random Nazi or TERF. DM groups take ages to load or stay in a weird half rendered state in the app. The seams are falling apart.
chasd00 4y ago
December ‘22 was peak drama. What does Feb ‘23 look like? Many advertisers have returned and many costs have been reduced.
- jeromegv 4y ago
  > Many advertisers have returned Do you have a source for that?
  - somedude895 4y ago
    I work at one of the biggest advertisers in my European country and we resumed spending just last month along with many other large brands plus at least one large agency. We had lengthy arguments with "activist" coworkers but ultimately persevered. So at least anecdotally, it's happening.
    - the_mitsuhiko 4y ago
      > we resumed spending just last month along with many other large brands Resumed spending or resumed spending at Twitter?
      - tablespoon 4y ago
        > Resumed spending or resumed spending at Twitter? Given the context, almost certainly "resumed spending at Twitter."
Terretta 4y ago
Previously (but only 10 pts): https://news.ycombinator.com/item?id=35025045 https://news.ycombinator.com/item?id=35025045 // What's the trick to resubmit identical links and not add vote to prior submission, to generate a new submission?
jurassic 4y ago
Revenue down 40% in Decemeber. Extrapolate that to an entire quarter (last year Q4 was 1.57B) means 942M of quarterly revenue. Out of that, he needs to pay something like 1.25B/4=312.5M (maybe more? Seems like some of the debt is variable rate) in interest on the loans he used to acquire the company. That’s 30% of revenue just needed to service Elon’s debt. That leaves $629M/quarter with which to operate the business which cost 1.38B to run in Q4 2021. Has he slashed operating costs by >55%? He fired 75% of employees but there are plenty of non-payroll costs as well that are harder to trim (real estate, storage and compute costs, etc). That’s what “trending toward break even” would look like. It all sounds pretty insane to me. But just imagine what the TWTR stock would have done if the last CEO had cut costs even a little without Elon’s debt weighing the balance sheet down and Elon’s erratic behavior scaring advertisers away. I think it shows Twitter could have very easily turned a healthy profit if that had been their priority. It was not a company in financial crisis as Musk apologists sometimes like to suggest.
- kibwen 4y ago
  > real estate Reports began surfacing as early as December that Musk is refusing to pay rent for Twitter's offices (https://www.cnbc.com/2022/12/13/twitter-reportedly-hasnt-paid-rent-on-its-office-spaces-for-weeks.html https://www.cnbc.com/2022/12/13/twitter-reportedly-hasnt-pai...), so we already know what his tactic is there. One might even be sympathetic, were it not for the fact that he also nixed WFH and ordered everyone back into the offices that he now refuses to pay for.
  - jurassic 4y ago
    I’m never sympathetic toward billionaires that don’t pay their bills.
  - tablespoon 4y ago
    > Reports began surfacing as early as December that Musk is refusing to pay rent for Twitter's offices... And what's the strategy there? Isn't the best that can be expected is Musk kicks the can down the road, and in the end pays the rent plus $$$ in legal fees? I'm sure someone will say Musk is a billionaire and they can weasel out of anything in the legal system, but he wasn't able to do that for the Twitter acquisition and wouldn't a lease be a pretty air-tight contract?
otikik 4y ago
Elon Musk is "real life's Tony Stark". ... He keeps getting his mansion and armor destroyed.
codeddesign 4y ago
[flagged]
popilewiz 4y ago
[dead]
grapesurgeon 4y ago
[dead]

81 points by donohoe 4y ago

https://archive.is/J7l42 https://archive.is/J7l42

Ad based businesses are getting hit hard, which explains the desire to switch to subscription based models. It doesn’t help when someone like Elon is chasing away advertisers with so much success. With the layoffs they’ve had I wonder how net profit etc are going to shape up. Since Twitter is now private a lot of numbers and finance info is going to be just hearsay and rumors… but things almost certainly can’t be going well.

sebzim4500 4y ago
>but things almost certainly can’t be going well. Is that obvious? Didn't they fire way more than 40% of the workforce? Presumably that was the biggest expense, so they should be much closer to profitable now than they were before.
- drcongo 4y ago
  The fact that they're being sued by the landlord of their offices because they can't pay the rent seems like a good indicator.
  - pavlov 4y ago
    Not just physical rents. The Information reports that Twitter is at least $70 million behind on their AWS bills: https://www.theinformation.com/articles/musk-delayed-paying-twitters-amazon-cloud-bill-sparking-ad-threat?rc=4ypc5n https://www.theinformation.com/articles/musk-delayed-paying-... Amazon is retaliating by not paying their Twitter ad bills, which seems like the kind of thing that can be effective against the Trump-Musk school of business operations.
    - DharmaPolice 4y ago
      Couldn't they just retaliate by stopping their AWS service? Isn't that what happens when you don't pay your bill?
      - moron4hire 4y ago
        That's kind of like the trope of a loan shark "busting people's legs". It doesn't do any good, because then they can't work to make the money they need to pay off the loan shark.
        bawolff 4y ago
        Threats only work if you carry them out when someone calls your bluff. The loan shark is interested in making sure everyone else pays.
      - interactivecode 4y ago
        just revoke their account and wipe their databases :-) like every other account that's behind on their bills
      - mleo 4y ago
        There is a 5-year contract in place, so a little different than just a credit card on file that is failing to charge based on usage. Also, it was reported they aren’t using the compute power as expected in contract, so the bill may not fully relate to actual resources consumed.
    - bawolff 4y ago
      That's insane. Why isn't amazon just pulling the plug? I imagine that with 40% staff, twitter now lacks the institutional knowledge to switch providers. Seems like amazon cutting them off would be a really effective way for amazon to make sure that they get paid first.
      - lapcat 4y ago
        > Seems like amazon cutting them off would be a really effective way for amazon to make sure that they get paid first. Or an effective way of killing Twitter, losing their money and a customer forever. Amazon can afford to play a patient game of tit-for-tat.
  - twelve40 4y ago
    if they went from >7000 to <2000 he might be trying to hardball renegotiate or terminate overpriced contracts to house that no longer existent army of workers that were probably put in place even before covid. Who knows since they are private, but that's what we're currently facing in SF ourselves - an empty office with a multiyear lease that nobody knows what the f to do with.
    - jeromegv 4y ago
      Sure he's trying to hardball, but he's also doing that with his Amazon bills, which can hardly be seen as a good sign.
- JanSt 4y ago
  They also have to pay a ton of additional interest and lost a lot of revenue
- d_e_solomon 4y ago
  From the article: > In an update to investors, Twitter reported a decline of about 40% year-over-year in both revenue and adjusted earnings for the month, the people said. If adjusted earnings are down 40% - which is a non GAAP way of measuring profit and usually more aggressive - Twitter is much further away from being profitable than it was pre-Musk.
- code_runner 4y ago
  A lot of severance but I don’t know how/where that is accounted for in stuff like this. I assume you are correct thought and they are on that path.
JPKab 4y ago
How much was it him "chasing away advertisers" vs activists pushing boycotts?
- Pxtl 4y ago
  Isn't that kind of the same thing? If you're so controversial that people successfully call to boycott you personally, is that not chasing away paying customers?
- jeromegv 4y ago
  Does not matter how much activist push to boycott, they aren't the ones paying the bills. There's been activist calls to boycott facebooks for so many years now and it has hardly made a dent into Facebook ads spending because companies know they make a good ROI from IG and FB ads. It's a business decision if you want to keep spending your advertising dollars on Twitter, and if for whatever reason the ROI is not there anymore, then you drop your advertising budget. Why is the ROI not there anymore? You have to ask.
  - mschuster91 4y ago
    > There's been activist calls to boycott facebooks for so many years now and it has hardly made a dent into Facebook ads spending because companies know they make a good ROI from IG and FB ads. Usually because Reddit and Facebook actually act on public outrage and close down hate groups.
- snowwrestler 4y ago
  Companies don’t care how “organic” a particular moment of public outage is. To make marketing decisions, they gauge the impact on their current and future business. If activists get public traction that will affect sales, the company will do something about it.
- the_duke 4y ago
  The advertisers care about "brand safety", which Musk completely undermined with his verification changes and the following wave of meme accounts impersonating companies. The changes were quickly rolled back to put safeguards and new check marks in place, but by that point a lot of advertisers had already decided to freeze their spending or even stop their campaigns. The wave of un-bans also didn't help. A screenshot was circulating of an Erasmus (student exchange program) ad appearing right under the tweet of a freshly un-banned Nazi, raving against some minority group. I doubt the woke activism made a big difference.
CyberDildonics 4y ago
Ad based businesses are getting hit hard What are you basing this on?
- HDThoreaun 4y ago
  Google and Meta earnings saying that cost per click is down around 15%

blitzar 4y ago

> In an update to investors, Twitter reported a decline of about 40% year-over-year in both revenue and adjusted earnings for the month, the people said. Mathematically this is difficult to believe... Unless the interest payment == the cost reductions or the interest was adjusted out of the adjusted earnings and the cost reductions == 40% etc. Someone somewhere in the long line of people from twitter to 'people familiar with the matter' are either making shit up or waving their hands in the air and grabbing the nearest number.

gregshap 4y ago
Yes adjusted earnings in this case is most likely something like "Adjusted EBITDA" so interest cost is adjusted out by definition, and they may also adjust out things like severance payments (if they are actually paying them).
- blitzar 4y ago
  "Adjusted EBITDA" is what I assumed as well - no interest, no restructuring costs etc. Given revenue ~= costs at twitter the head count reduction (~80% and including all the really fat cats at the top) & reduction in expensive microservices, benefits, free meals etc has shaved only 40% off the costs.
kasey_junk 4y ago
Googles ad revenue fell around 10% in the same period just based on secular trends. Twitter fired their ad sales team and angered their ad partners. It seems perfectly feasible they added a 30% drop. Also investor calls are extremely easy to source because there are so many people on the call and most of them have no vested interest in keeping the numbers secret.
- tablespoon 4y ago
  > Twitter fired their ad sales team and angered their ad partners. Which was just baffling move to me. We're not selling enough, so fire the sales team and let the product sell itself? How does that make any sense? I suppose they could have been thinking Blue check-mark sales would magically plug the hole, but that was quickly proved to be a stupid, over-optimistic idea.

causi 4y ago

I don't understand why Musk didn't wait a few months for things to settle down before raising hell at Twitter. Before he bought it people were saying "He's gonna destroy Twitter!" and then he buys it and behaves as if he intends to prove them right.

jameskilton 4y ago
Because to him this isn't "raising hell", this is "solving Twitter". But he's still not capable of understanding that social media is actually a far, far harder problem than cars or even rocket science. Specifically, social media does not have an end goal, like a car on the road or getting people into and back home from space safely. Social media is infinitely messy because that's what we humans are, and you can't "fix" that.
- causi 4y ago
  Even if he was totally right he was aware that most people thought he was wrong. It's insane to make advertisers and investors think you're a lunatic whether or not you actually are when your income is dependent on those advertisers.
DeathArrow 4y ago
Waiting would probably meant bigger losses in time. If you want to refactor a business, better do it quick.
- SketchySeaBeast 4y ago
  I think refactor might be the wrong term here - typically if you want to refactor something you have to know what it's doing and why it's broken. In my uninformed opinion it seems like the changes happened so fast there was no time for that initial evaluation.
drcongo 4y ago
My main takeaway from watching him fumble around haplessly at Twitter is that there's not a chance in hell that I'd ever get in a car built by a company that he runs like that, let alone a rocket.

biorach 4y ago

> Some of Twitter’s debt carries an annual interest rate of almost 15%. !!! Is there more information on this? How much is the principle, who are the lenders and what are the terms?

kasey_junk 4y ago
https://www.reuters.com/markets/us/how-will-elon-musk-pay-twitter-2022-10-07/ https://www.reuters.com/markets/us/how-will-elon-musk-pay-tw... 13B from a few big banks including Morgan Stanley. Rumor was that they were trying to sell the debt for 60c on the dollar but I don’t think that’s played out.
ksherlock 4y ago
https://www.wsj.com/articles/elon-musk-explores-raising-up-to-3-billion-to-pay-off-twitter-debt-11674669412 https://www.wsj.com/articles/elon-musk-explores-raising-up-t... "Twitter’s unsecured bridge loans, which total $3 billion, are the most expensive portion of the $13 billion debt package Mr. Musk incurred as part of his $44 billion acquisition of the social-media company. They carry an interest rate of 10% plus the secured overnight financing rate, a benchmark interest rate that has shot up in recent months and currently sits at 4.3%." "With every quarter that passes without Twitter refinancing the debt, the interest rate goes up by an additional 0.50 percentage point, according to regulatory filings. Twitter’s first quarterly interest payment is due at the end of the month, the filings show."
- biorach 4y ago
  15% of 3B! ouch

tonetheman 4y ago

[dead]

kramerger 4y ago

Well, what did you except? Companies spend less money on ads in times like these. Musks childish behaviour plus instability and free speach issues made it really easy for companies to cut on their twitter ad spending first

paul7986 4y ago
He's Trump and a used car salesman rolled into one. I was a fan of his before I started following him in November 2022. A few weeks later I un-followed him and once again stopped using Twitter altogether.
- justinzollars 4y ago
  [flagged]
  - delecti 4y ago
    The "Twitter Files" are total nothingburgers though. There weren't any biting revelations, just hype and poor framing.
    - justinzollars 4y ago
      [flagged]
      - kramerger 4y ago
        FYI, Twitter just stopped publishing their own transparency report.
      - popularrecluse 4y ago
        [flagged]
  - qsdf38100 4y ago
    What is that about?

everly 4y ago

It's interesting to consider that the company was profitable in 2018 ($1.2B) & 2019 ($1.4B) [0]. It would have also been profitable in 2021 if not for a $900 million lawsuit settlement hitting the books. It was by no means a sinking ship until the acquisition and subsequent "improvements". Perhaps they'll turn it around but there was probably a more predictable path back to profitability than the one Musk chose. [0] https://www.statista.com/statistics/274563/annual-net-income-of-twitter/ https://www.statista.com/statistics/274563/annual-net-income...

miohtama 4y ago
While Twitter itself is not a sinking ship, the current equity holders are. The debt cost will be ~1.5B this year. The current equity holders will be diluted thru a new funding or thru a bankruptcy liquidation, though I feel it's unlikely Elon let's it go that far.

MontyCarloHall 4y ago

Can the drop in revenue be offset by the ~80% drop in payroll? None of the prognostications about Twitter’s total and utter technical collapse after such a dramatic headcount reduction came true [0]. It still may be a bit premature even after a few months to say that the company is perfectly fine with so few engineers (e.g. can it survive a disaster recovery situation [1]?), but the platform is definitely performing far better than almost anyone predicted. [0] https://daringfireball.net/2022/12/twitter_still_up https://daringfireball.net/2022/12/twitter_still_up [1] https://twitter.com/matthew_d_green/status/1591939282947952640?lang=en https://twitter.com/matthew_d_green/status/15919392829479526...

phphphphp 4y ago
The site has been pretty unstable recently. The headcount cost reduction is worth much less than the additional cost of lost ad revenue + interest payments. Twitter was break even pre-Elon and is now down billions per year.
miohtama 4y ago
No, because Elon funded the acquisition with loan money and yearly debt payments alone jumped to 1.5B.
par 4y ago
> definitely performing far better than almost anyone predicted. Everytime I log in to the twitter app, the notification icon lights up, then turns off, and sometimes it lights up again with some delay. Some other times it stays lit up and doesn't turn off, even though I have no new notifications. It's gotten to the point where I no longer check the notifications because the indicator is wrong almost all the time.
mschuster91 4y ago
> None of the prognostications about Twitter’s total and utter technical collapse after such a dramatic headcount reduction came true [0]. There are a lot of annoying bugs that cropped up over the last months, and most of these involve features rarely used. My pet peeve is search: You have to do a search using the from-keyword like ten times or more until it actually shows results. When you scroll down for older results, you have to scroll to top and then to the bottom again because it doesn't have an "Older" button, just infinite scroll. There is no way to make the search remember you prefer recent results instead of "top" with a completely intransparent ranking. On top of that comes general instability - the app and website keeps randomly forgetting you're in the "I follow" timeline, the "for me" algorithmic timeline has sometimes hours worth of lag and is filled with crap - no I don't want to see porn someone else liked, or endless pages of replies against some random Nazi or TERF. DM groups take ages to load or stay in a weird half rendered state in the app. The seams are falling apart.

chasd00 4y ago

December ‘22 was peak drama. What does Feb ‘23 look like? Many advertisers have returned and many costs have been reduced.

jeromegv 4y ago
> Many advertisers have returned Do you have a source for that?
- somedude895 4y ago
  I work at one of the biggest advertisers in my European country and we resumed spending just last month along with many other large brands plus at least one large agency. We had lengthy arguments with "activist" coworkers but ultimately persevered. So at least anecdotally, it's happening.
  - the_mitsuhiko 4y ago
    > we resumed spending just last month along with many other large brands Resumed spending or resumed spending at Twitter?
    - tablespoon 4y ago
      > Resumed spending or resumed spending at Twitter? Given the context, almost certainly "resumed spending at Twitter."

Terretta 4y ago

Previously (but only 10 pts): https://news.ycombinator.com/item?id=35025045 https://news.ycombinator.com/item?id=35025045 // What's the trick to resubmit identical links and not add vote to prior submission, to generate a new submission?

jurassic 4y ago

Revenue down 40% in Decemeber. Extrapolate that to an entire quarter (last year Q4 was 1.57B) means 942M of quarterly revenue. Out of that, he needs to pay something like 1.25B/4=312.5M (maybe more? Seems like some of the debt is variable rate) in interest on the loans he used to acquire the company. That’s 30% of revenue just needed to service Elon’s debt. That leaves $629M/quarter with which to operate the business which cost 1.38B to run in Q4 2021. Has he slashed operating costs by >55%? He fired 75% of employees but there are plenty of non-payroll costs as well that are harder to trim (real estate, storage and compute costs, etc). That’s what “trending toward break even” would look like. It all sounds pretty insane to me. But just imagine what the TWTR stock would have done if the last CEO had cut costs even a little without Elon’s debt weighing the balance sheet down and Elon’s erratic behavior scaring advertisers away. I think it shows Twitter could have very easily turned a healthy profit if that had been their priority. It was not a company in financial crisis as Musk apologists sometimes like to suggest.

kibwen 4y ago
> real estate Reports began surfacing as early as December that Musk is refusing to pay rent for Twitter's offices (https://www.cnbc.com/2022/12/13/twitter-reportedly-hasnt-paid-rent-on-its-office-spaces-for-weeks.html https://www.cnbc.com/2022/12/13/twitter-reportedly-hasnt-pai...), so we already know what his tactic is there. One might even be sympathetic, were it not for the fact that he also nixed WFH and ordered everyone back into the offices that he now refuses to pay for.
- jurassic 4y ago
  I’m never sympathetic toward billionaires that don’t pay their bills.
- tablespoon 4y ago
  > Reports began surfacing as early as December that Musk is refusing to pay rent for Twitter's offices... And what's the strategy there? Isn't the best that can be expected is Musk kicks the can down the road, and in the end pays the rent plus $$$ in legal fees? I'm sure someone will say Musk is a billionaire and they can weasel out of anything in the legal system, but he wasn't able to do that for the Twitter acquisition and wouldn't a lease be a pretty air-tight contract?

otikik 4y ago

Elon Musk is "real life's Tony Stark". ... He keeps getting his mansion and armor destroyed.

codeddesign 4y ago

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popilewiz 4y ago

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grapesurgeon 4y ago

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