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Musk's actions generally speaking make a lot of financial sense, it's just that he bought a company that wasn't founded on financial sense, and now all that deb

Musk's actions generally speaking make a lot of financial sense, it's just that he bought a company that wasn't founded on financial sense, and now all that debt requires payment because the economy is in tatters

richbell 3y ago
> Musk's actions generally speaking make a lot of financial sense, it's just that he bought a company that wasn't founded on financial sense... He bought it for ~40% more than it was valued and then scared away a lot of advertisers. That does not make financial sense, and is in large part the root of Twitter/his money problems.
- BasedAnon 3y ago
  Advertisement is not a sustainable business model
  - dvngnt_ 3y ago
    Google has done pretty well
    - BasedAnon 3y ago
      Of course they did, they have a monopoly
bathtub365 3y ago
Buying Twitter at the price he bought it at made no sense once the market turned. It would have made financial sense to structure the deal in a way that it was easy for him to get out of, but he didn’t. Twitter has also now been saddled with additional debt with interest that needs to be paid on a regular basis since it was a leveraged buyout. I’ve been thinking about the deal since it happened and it certainly doesn’t seem to make financial sense to me.
heartbreak 3y ago
Where do you think the debt came from?!
- BasedAnon 3y ago
  Alot of it was from the acquisition yes, but Twitter was already in debt.
photonerd 3y ago
His actions make zero financial sense. He bought it 30-40% overvalued, has tanked its income, destroyed its brand reputation, absolutely set fire to advertiser trust & safety. Most estimates put it at ~25% of the value he paid 7 months ago. All the debt you mention? He saddled them with that. That was t there until he came along. Another failure. About the only positive financial thing you can say he did is cut payroll costs. Unfortunately he did that at the expense of site stability & reliability. It will be studied in MBA programs as an example of what NOT to do
- BasedAnon 3y ago
  >has tanked its income Income doesn't matter if you're not profitable. >All the debt you mention? He saddled them with that. No, Twitter was already in debt. The alternative was letting it die, which mind you I don't think would have been a bad idea, but if Musk's goal is to keep it alive then the huge amounts of debt would certainly do that. >Unfortunately he did that at the expense of site stability & reliability. The site did not have the efficiency or importance to warrant the number of employees it had.
  - richbell 3y ago
    > No, Twitter was already in debt. Twitter had around 5.5 billion in debt prior to the buyout. Elon added approximately 13 billion to that. No rational person would look at his actions and claim they "[made] a lot of financial sense".
jitl 3y ago
The new Twitter Blue subscription revenue is a tiny drop in the bucket compared to the advertising loss and the debt he saddled the company with.
- BasedAnon 3y ago
  Perhaps, but Twitter blue is a more reliable stream of income.
  - dragonwriter 3y ago
    Yes, it is more reliably and inalterably inadequate to pay Twitter’s debt.
astrange 3y ago
The economy is in great shape despite how many people try to cope a recession into existence. ("Inflation" is a bad thing that can only happen in a good economy.) He bought the company because he was mad they banned a hate speech account he thought was funny, unbanned them and brought all the other racists back to juice the numbers and so he could reply-guy them, and instantly lost all the advertisers because they don't want to be associated with statue avatar Nazis. That was not good business sense.
- BasedAnon 3y ago
  >The economy is in great shape despite how many people try to cope a recession into existence sure it's not like several banks have collapsed or anything... >That was not good business sense. I'm not in favor of letting nazis on platforms, but having your business decisions be beholden to advertisers is always a disaster in the making.
  - astrange 3y ago
    > sure it's not like several banks have collapsed or anything... That's too bad for the shareholders of the banks but it doesn't matter for anyone else.
- hersko 3y ago
  Do you really consider the Babylon Bee a hate speech account?
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snowwrestler 3y ago
I agree with you in part: Twitter needed its costs slashed even before the acquisition, and the post-acquisition debt load made it into a crisis. But on top of cutting costs, Musk has also made terrible product and communication decisions that killed significant amounts of revenue and audience.
- BasedAnon 3y ago
  Killed audience? Most certainly, but as far as revenue I do think he's making headway. The fact is once you start demanding money for things people leave. The idea that users = money has never been true.

richbell 3y ago

> Musk's actions generally speaking make a lot of financial sense, it's just that he bought a company that wasn't founded on financial sense... He bought it for ~40% more than it was valued and then scared away a lot of advertisers. That does not make financial sense, and is in large part the root of Twitter/his money problems.

BasedAnon 3y ago
Advertisement is not a sustainable business model
- dvngnt_ 3y ago
  Google has done pretty well
  - BasedAnon 3y ago
    Of course they did, they have a monopoly

bathtub365 3y ago

Buying Twitter at the price he bought it at made no sense once the market turned. It would have made financial sense to structure the deal in a way that it was easy for him to get out of, but he didn’t. Twitter has also now been saddled with additional debt with interest that needs to be paid on a regular basis since it was a leveraged buyout. I’ve been thinking about the deal since it happened and it certainly doesn’t seem to make financial sense to me.

heartbreak 3y ago

Where do you think the debt came from?!

BasedAnon 3y ago
Alot of it was from the acquisition yes, but Twitter was already in debt.

photonerd 3y ago

His actions make zero financial sense. He bought it 30-40% overvalued, has tanked its income, destroyed its brand reputation, absolutely set fire to advertiser trust & safety. Most estimates put it at ~25% of the value he paid 7 months ago. All the debt you mention? He saddled them with that. That was t there until he came along. Another failure. About the only positive financial thing you can say he did is cut payroll costs. Unfortunately he did that at the expense of site stability & reliability. It will be studied in MBA programs as an example of what NOT to do

BasedAnon 3y ago
>has tanked its income Income doesn't matter if you're not profitable. >All the debt you mention? He saddled them with that. No, Twitter was already in debt. The alternative was letting it die, which mind you I don't think would have been a bad idea, but if Musk's goal is to keep it alive then the huge amounts of debt would certainly do that. >Unfortunately he did that at the expense of site stability & reliability. The site did not have the efficiency or importance to warrant the number of employees it had.
- richbell 3y ago
  > No, Twitter was already in debt. Twitter had around 5.5 billion in debt prior to the buyout. Elon added approximately 13 billion to that. No rational person would look at his actions and claim they "[made] a lot of financial sense".

jitl 3y ago

The new Twitter Blue subscription revenue is a tiny drop in the bucket compared to the advertising loss and the debt he saddled the company with.

BasedAnon 3y ago
Perhaps, but Twitter blue is a more reliable stream of income.
- dragonwriter 3y ago
  Yes, it is more reliably and inalterably inadequate to pay Twitter’s debt.

astrange 3y ago

The economy is in great shape despite how many people try to cope a recession into existence. ("Inflation" is a bad thing that can only happen in a good economy.) He bought the company because he was mad they banned a hate speech account he thought was funny, unbanned them and brought all the other racists back to juice the numbers and so he could reply-guy them, and instantly lost all the advertisers because they don't want to be associated with statue avatar Nazis. That was not good business sense.

BasedAnon 3y ago
>The economy is in great shape despite how many people try to cope a recession into existence sure it's not like several banks have collapsed or anything... >That was not good business sense. I'm not in favor of letting nazis on platforms, but having your business decisions be beholden to advertisers is always a disaster in the making.
- astrange 3y ago
  > sure it's not like several banks have collapsed or anything... That's too bad for the shareholders of the banks but it doesn't matter for anyone else.
hersko 3y ago
Do you really consider the Babylon Bee a hate speech account?
- deleted 3y ago
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- deleted 3y ago
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snowwrestler 3y ago

I agree with you in part: Twitter needed its costs slashed even before the acquisition, and the post-acquisition debt load made it into a crisis. But on top of cutting costs, Musk has also made terrible product and communication decisions that killed significant amounts of revenue and audience.

BasedAnon 3y ago
Killed audience? Most certainly, but as far as revenue I do think he's making headway. The fact is once you start demanding money for things people leave. The idea that users = money has never been true.