Elon Musk, in his first address to Twitter Inc. employees since purchasing the company for $44 billion, said that bankruptcy was a possibility if it doesn’t start generating more cash, according to a person familiar with the matter.
The warning came amid a tumultuous start to Musk’s reign at the social media company — a two-week period in which he has fired half of Twitter’s staff, ushered out most of the top executives and ordered the remaining employees to stop working from home. Two executives who until today had emerged as part of Musk’s new leadership team, Yoel Roth and Robin Wheeler, are also on the way out, people familiar with the situation said.
Yoel Roth is awful, and it’s good that he’s on his way out. Having said that, the damage appears to have already been done.
With Chairman Moike now gone from twitter, my interest in the site has dropped down to null. Sure, the Daily Rake still somehow has our account, but don’t be waiting with baited breath for me to post any original content on there. We still have more followers on Poast, and far more engagement.
While the buyout has removed Twitter from the scrutiny of public markets, Musk loaded the company with almost $13 billion of debt that’s now in the hands of seven Wall Street banks that have been unable to offload it to investors.
Confidence in the company has eroded so rapidly that, even before Musk’s bankruptcy comments, some funds were offering to buy the loans for as little as 60 cents on the dollar — a price typically reserved for companies deemed in financial distress, Bloomberg News reported on Thursday.
Let me explain what that means. If you knew that someone was full value for paying back their debt, then the value of said debt is exactly how much money they owe you. However, if you’re not sure that they will pay you back, you need to start valuing the debt that you hold as worth less than the nominal amount. Sixty cents on the dollar is pretty bad, and it indicates that the relevant funds thought twitter was going belly up, to the point where even in bankruptcy court they would not expect to get much value out of them.
Having said that, I think it’s bullshit. There are a huge amount of funds out there. They can offer whatever lowball price they feel like for twitter debt. The relevant number is the price at which the debt is actually being sold at, which is undoubtedly higher.
The social network has seen a pullback from some advertisers that are concerned about Musk’s plans for content moderation.
Debt investors and credit raters are also showing little confidence. The company’s banks have been quietly sounding out hedge funds and other asset managers for their interest in buying a chunk of the company’s debt.
Discussions so far have centered around the $6.5 billion leveraged loan portion of the financing, people with knowledge of the talks said. Banks had seemed unwilling to sell for any price below 70 cents on the dollar, according to one of the people. Even at that level, losses could run into the billions of dollars, Bloomberg calculations show.
Elon Musk has been an enormous disappointment thus far. He whines about not having enough money, but then he only fired a small amount of the useless eaters at twitter, and gave them an extra six weeks of severance for no particular reason.
Social media corporations are winner take all markets to the umpteenth degree. The reason why nobody makes their own YouTube or Twitter or Facebook is because the value of these sites is not their technology, which for Twitter and Facebook doesn’t exist, but rather their userbase. It’s impossible to provide a competing product, because you can’t overcome the tremendous value of the existing userbase.
Or at least, it’s very difficult to compete with them. However, if you cheat, and use your (((racial activism))) to get twitter deplatformed from Apple and Google stores, while whipping up an alternative and then getting celebrities to quit Twitter and go on the other site all in one go, it’s hard to say what the outcome would be. If Musk let everybody interesting back on Twatter, he’d probably be able to hold him off, but I would not put it past this little bitch to let the ADL bully him into not letting the uppity goyim who bring the interesting content back on his site, only to get his balls fed into his mouth as the Democracy Class dipshits all migrate over to a new site anyway. Considering that he has a tranny son, and refuses to name the ADL while whining about “activist groups,” trying to destroy his business, I’d say he’s shown himself to be eminently bullyable.