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> Well, after Musk fired 80% of twitters engineering team "Fidelity believes that X is worth 71.5% less than at the time of purchase, according to a new disclo

by lapcat 3y ago

> Well, after Musk fired 80% of twitters engineering team "Fidelity believes that X is worth 71.5% less than at the time of purchase, according to a new disclosure that runs through the end of November 2023" https://www.axios.com/2023/12/31/elon-musks-x-fidelity-valuation-cut https://www.axios.com/2023/12/31/elon-musks-x-fidelity-valua...

gumballindie 3y ago
The value of the business tanked due to Musks poor decisions. The value of twitter didnt drop because a worker didnt add more unit tests. Actually not doing it may be the reason it’s not bankrupt yet. If bro wouldnt have run his mouth like the baby he is it would have skyrocketed.
- zeroCalories 3y ago
  It's still pretty funny seeing people cope about Twitter. Turns out you don't need that many engineers for a feature complete product.
  - dottjt 3y ago
    That might be so, but are those engineers being worked into the ground to make it happen?
    - peteradio 3y ago
      Make what happen? Apply security patches? Engineers aren't needed to push the electrons around the computers, that happens automatically.
  - grotted 3y ago
    I'm not an engineer, but...Twitter doesn't seem to be doing all that well.
  - svaha1728 3y ago
    Those in power seizing control of a product once it’s created is a timeless story. See the Prague clock tower or Daedalus the Labyrinth builder who was imprisoned there by King Minos. Not a new story, or a particularly wise business decision.
  - absoluteunit1 3y ago
    I don’t have much experience (4 years as a full time dev; FAANG and some medium sized startups) but honestly this is the truth. Some of the projects at these companies are so over bloated and redundant that if a company wanted to save money, they can easily fire a lot of folks, keep the necessary teams for the money making products and go into maintenance mode to keep the existing cash cows going
- light_hue_1 3y ago
  Yes that's exactly why their value dropped. Because value isn't the present value of the business. It's the future competitiveness and innovation they bring to the table. Twitter has none of that anymore. There's no hope for growth, a new product, etc.
  - mrangle 3y ago
    Exactly why the value dropped was advertiser pullout due to a partisan pressure campaign. Which was not a free campaign in terms of political currency.
- Paul-Craft 3y ago
  He's definitely doing a good job showing that the easiest way to create a $10B company is to start with a $43B company, that's for sure.
- lapcat 3y ago
  > it would have skyrocketed How so? Costs were cut, but cutting costs doesn't do anything to increase gross revenue, nor does it do anything to increase the user base. You can't just cut your way to making a profit on a $44 billion investment.
- deleted 3y ago
  [deleted]
fallingknife 3y ago
And that's absolutely his fault, but for crossing the news media and pissing off his advertisers, not cutting engineers. The site is still running fine. If he had just made the engineering cuts and kept his mouth shut he would be making a pile of money on the acquisition right now.
- lapcat 3y ago
  > If he had just made the engineering cuts and kept his mouth shut he would be making a pile of money on the acquisition right now. Twitter cost $44 billion to acquire. The employee layoffs save maybe $1 or $2 billion per year. Where do you see the pile of money coming from? You can keep a preexisting service running for a while with a skeleton crew. But what are the long-term prospects for that service? And when will the skeleton crew get burned out?
  - fallingknife 3y ago
    Companies like Twitter are valued at a huge multiple of earnings. e.g. META is 33x earnings. So if you cut costs by $2 billion a year, that would come back as $66 billion of equity value. It's not exactly that simple, but close enough. As for your other questions, it's coming up on 2 years now. I'd say that's too long to be running on autopilot.
    - lapcat 3y ago
      > Companies like Twitter are valued at a huge multiple of earnings. e.g. META is 33x earnings. Meta is not a company like Twitter. Yes, they're both social media services, but otherwise the comparison is not apt. Meta/Facebook is in the top 10 companies by market cap, has about $117 billion in revenue per year, and has been hugely profitable for a very long time, unlike Twitter, which has barely made a profit ever. > So if you cut costs by $2 billion a year, that would come back as $66 billion of equity value. Um, no, sorry, that's extremely questionable, based on a false comparison, and if it were that easy, Twitter would have already done it before the acquisition.
- mrangle 3y ago

by lapcat 3y ago

gumballindie 3y ago

The value of the business tanked due to Musks poor decisions. The value of twitter didnt drop because a worker didnt add more unit tests. Actually not doing it may be the reason it’s not bankrupt yet. If bro wouldnt have run his mouth like the baby he is it would have skyrocketed.

zeroCalories 3y ago
It's still pretty funny seeing people cope about Twitter. Turns out you don't need that many engineers for a feature complete product.
- dottjt 3y ago
  That might be so, but are those engineers being worked into the ground to make it happen?
  - peteradio 3y ago
    Make what happen? Apply security patches? Engineers aren't needed to push the electrons around the computers, that happens automatically.
- grotted 3y ago
  I'm not an engineer, but...Twitter doesn't seem to be doing all that well.
- svaha1728 3y ago
  Those in power seizing control of a product once it’s created is a timeless story. See the Prague clock tower or Daedalus the Labyrinth builder who was imprisoned there by King Minos. Not a new story, or a particularly wise business decision.
- absoluteunit1 3y ago
  I don’t have much experience (4 years as a full time dev; FAANG and some medium sized startups) but honestly this is the truth. Some of the projects at these companies are so over bloated and redundant that if a company wanted to save money, they can easily fire a lot of folks, keep the necessary teams for the money making products and go into maintenance mode to keep the existing cash cows going
light_hue_1 3y ago
Yes that's exactly why their value dropped. Because value isn't the present value of the business. It's the future competitiveness and innovation they bring to the table. Twitter has none of that anymore. There's no hope for growth, a new product, etc.
- mrangle 3y ago
  Exactly why the value dropped was advertiser pullout due to a partisan pressure campaign. Which was not a free campaign in terms of political currency.
Paul-Craft 3y ago
He's definitely doing a good job showing that the easiest way to create a $10B company is to start with a $43B company, that's for sure.
lapcat 3y ago
> it would have skyrocketed How so? Costs were cut, but cutting costs doesn't do anything to increase gross revenue, nor does it do anything to increase the user base. You can't just cut your way to making a profit on a $44 billion investment.
deleted 3y ago
[deleted]

fallingknife 3y ago

And that's absolutely his fault, but for crossing the news media and pissing off his advertisers, not cutting engineers. The site is still running fine. If he had just made the engineering cuts and kept his mouth shut he would be making a pile of money on the acquisition right now.

lapcat 3y ago
> If he had just made the engineering cuts and kept his mouth shut he would be making a pile of money on the acquisition right now. Twitter cost $44 billion to acquire. The employee layoffs save maybe $1 or $2 billion per year. Where do you see the pile of money coming from? You can keep a preexisting service running for a while with a skeleton crew. But what are the long-term prospects for that service? And when will the skeleton crew get burned out?
- fallingknife 3y ago
  Companies like Twitter are valued at a huge multiple of earnings. e.g. META is 33x earnings. So if you cut costs by $2 billion a year, that would come back as $66 billion of equity value. It's not exactly that simple, but close enough. As for your other questions, it's coming up on 2 years now. I'd say that's too long to be running on autopilot.
  - lapcat 3y ago
    > Companies like Twitter are valued at a huge multiple of earnings. e.g. META is 33x earnings. Meta is not a company like Twitter. Yes, they're both social media services, but otherwise the comparison is not apt. Meta/Facebook is in the top 10 companies by market cap, has about $117 billion in revenue per year, and has been hugely profitable for a very long time, unlike Twitter, which has barely made a profit ever. > So if you cut costs by $2 billion a year, that would come back as $66 billion of equity value. Um, no, sorry, that's extremely questionable, based on a false comparison, and if it were that easy, Twitter would have already done it before the acquisition.
mrangle 3y ago