3 ms·

What does this mean in layman's terms?

• matchagaucho 12y ago
  Loan Twitter money now. They'll pay back in 2019 or 2021, with interest.
  • JonathonW 12y ago
    Assuming they don't go under before then. Twitter has yet to turn a profit.
    • jlas 12y ago
      i.e. when people start realizing that frivolous social media start-ups provide way less value then their inordinate valuations and the bubble bursts.
      • lumens 12y ago
        IMHO, Twitter provides exceptional value... but their ability to monetize that value is still catching up.
      • blumkvist 12y ago
        It's such a shame... I like twitter so much. They just took so much money, they don't really have a choice right now, but to ride the train.
• bretpiatt 12y ago
  Twitter gets $1.3B in cash for a promise to pay interest in either cash or Twitter stock and eventually pay off the loan likely in the form of Twitter stock.
• cliftonk 12y ago
  They'd rather take on debt than issue equity. Convertible debt turns into equity in the future unless it's paid off on some defined schedule.
• trevelyan 12y ago
  They have no way of making money or controlling costs.
• jonmcauliffe 12y ago
  twitter would like to borrow money from you. they will pay a reduced interest rate on the loan. in exchange, you will get the option to convert your loan into shares of twitter at a designated, unchanging price--likely near the current stock price. this is a great deal for twitter, as long as their stock price does not go up. in other words, twitter is calling the top of the market for its own shares -- to the tune of 1.3B. bezos did this to great effect with amazon in the late 90s. he did in fact correctly predict a prolonged stagnation in share price.
  • howlin 12y ago
    Of course, the share price stagnation is a bit of a self-fulfilling prophecy. If the share price rises too much, bond holders will convert and cash out early. Even the understanding that this is possible puts a damper on peoples' assessment of the stock's upside potential.