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> American ad revenues was down 80% to $114M/quarter since the acquisition Debt service was estimated at ~$100m/mo, with the likelihood that rates on some of t

by runako 2y ago

> American ad revenues was down 80% to $114M/quarter since the acquisition Debt service was estimated at ~$100m/mo, with the likelihood that rates on some of the debt could increase substantially since the financing was initially booked in mid 2022. If these numbers are directionally accurate (and they do not report, so we don't know for sure), this thing is probably closer to losing a billion $ annually than to breakeven.

mistrial9 2y ago
> Debt service was estimated at ~$100m/mo source?
- runako 2y ago
  Many sources for this, including: https://www.thestreet.com/technology/elon-musk-has-a-huge-twitter-debt-bill https://www.thestreet.com/technology/elon-musk-has-a-huge-tw... and https://www.nytimes.com/2022/10/30/technology/elon-musk-twitter-debt.html https://www.nytimes.com/2022/10/30/technology/elon-musk-twit... https://www.bloomberg.com/news/articles/2023-05-03/twitter-said-to-make-second-interest-payment-on-musk-buyout-debt?sref=Bgsklk5a https://www.bloomberg.com/news/articles/2023-05-03/twitter-s... If you don't like my choice of sources, any popular search engine will help you surface additional sources.
- dragontamer 2y ago
  $13 Billion leveraged buyout means that Twitter took on $13 Billion in loans for the privilege of being bought out by Elon. Assuming a rough interest rate of 10% to 15%, leaves 100million to 150million / month on debt alone.
  - throwaway2037 2y ago
    > Assuming a rough interest rate of 10% to 15% Do you have a source on this? I couldn't find anything.
    - dragontamer 2y ago
      On Twitters specific loan terms? No. But market rates are well known and well published. CCC class loans were 10% in April 2022 when these deals were likely. So 10% to 15% covers the possible range of loans if you know much about the market. https://fred.stlouisfed.org/series/BAMLH0A3HYCEY https://fred.stlouisfed.org/series/BAMLH0A3HYCEY The higher end of 15% would be possible if the loans were finalized closer to May or June. There is a big difference from Feb 2022 vs April 2022 though. But we know the rough timeline of Twitters acquisition as well as the rough timeline of when deals were signed. So I'm reasonably confident in an April 2022 deal.
    - runako 2y ago
      Lower tiers of non-investment-grade corporate bonds currently yielding ~14%: https://fred.stlouisfed.org/series/BAMLH0A3HYCEY https://fred.stlouisfed.org/series/BAMLH0A3HYCEY Looks like when he took down the financing, rates would have been in the 12% range. Possible some/all of the debt has been rolled over since then, possibly at higher rates.

by runako 2y ago

mistrial9 2y ago

> Debt service was estimated at ~$100m/mo source?

runako 2y ago
Many sources for this, including: https://www.thestreet.com/technology/elon-musk-has-a-huge-twitter-debt-bill https://www.thestreet.com/technology/elon-musk-has-a-huge-tw... and https://www.nytimes.com/2022/10/30/technology/elon-musk-twitter-debt.html https://www.nytimes.com/2022/10/30/technology/elon-musk-twit... https://www.bloomberg.com/news/articles/2023-05-03/twitter-said-to-make-second-interest-payment-on-musk-buyout-debt?sref=Bgsklk5a https://www.bloomberg.com/news/articles/2023-05-03/twitter-s... If you don't like my choice of sources, any popular search engine will help you surface additional sources.
dragontamer 2y ago
$13 Billion leveraged buyout means that Twitter took on $13 Billion in loans for the privilege of being bought out by Elon. Assuming a rough interest rate of 10% to 15%, leaves 100million to 150million / month on debt alone.
- throwaway2037 2y ago
  > Assuming a rough interest rate of 10% to 15% Do you have a source on this? I couldn't find anything.
  - dragontamer 2y ago
    On Twitters specific loan terms? No. But market rates are well known and well published. CCC class loans were 10% in April 2022 when these deals were likely. So 10% to 15% covers the possible range of loans if you know much about the market. https://fred.stlouisfed.org/series/BAMLH0A3HYCEY https://fred.stlouisfed.org/series/BAMLH0A3HYCEY The higher end of 15% would be possible if the loans were finalized closer to May or June. There is a big difference from Feb 2022 vs April 2022 though. But we know the rough timeline of Twitters acquisition as well as the rough timeline of when deals were signed. So I'm reasonably confident in an April 2022 deal.
  - runako 2y ago
    Lower tiers of non-investment-grade corporate bonds currently yielding ~14%: https://fred.stlouisfed.org/series/BAMLH0A3HYCEY https://fred.stlouisfed.org/series/BAMLH0A3HYCEY Looks like when he took down the financing, rates would have been in the 12% range. Possible some/all of the debt has been rolled over since then, possibly at higher rates.