Last year, Twitter’s interest expense was about $50 million. With the new debt taken on in the deal, that will now balloon to about $1 billion a year. Yet the company’s operations last year generated about $630 million in cash flow to meet its financial obligations.
That means that Twitter is generating less money per year than what it owes its lenders. The company also does not appear to have a lot of extra cash on hand. While it had about $6 billion in cash before Mr. Musk’s buyout, a large portion of that probably went into the cost of closing the acquisition.
...
To make ends meet, Mr. Musk probably has to slash costs — by a lot. Over the weekend, he was said to be already moving to do so by ordering job cuts across Twitter. One investor who put less than $1 million in the buyout of the company said he was told by the head of Mr. Musk’s family office to expect that around 50 percent of Twitter’s 7,500 employees would be laid off.
Yeah there's no way it's worth $19 billion. With its current expenses you can just sit back and wait for bankruptcy proceedings to pick it up cheap if you wanted it.
The "Elon is saving free speech, so this is worth it" argument for this incredible destruction of value is what cracks me up.
The internet had/has no problem hosting repugnant viewpoints. Plenty of web hosting providers are available for you to share your most vile, hateful thoughts. We're watching a very powerful person discover in real time that free speech isn't something that generates value on its own.
Saying Elon is "free speech" at all is a joke. He could have lined up certain principles and been fine. It's not like the last CEO and ownership group was really killing it. There was a lot of unfairness. Elon just made it much worse. He has even suspended accounts that have merely said something negative about him. On a few popular threads critical of Elon, likes keep disappearing and reach gets limited.
It’s definitely not true. Elon way overpaid for Twitter and even tried to back out. Twitter was also in poor financial shape and it was losing money. Frankly after this many years I couldn’t see it as a growth stock.
Twitter was losing $200 million/year in 2021 IIRC.
Taking a $13 Billion loan and therefore being charged $1.3 Billion/year in interest payments means its going down the Xitter faster than ever before. The amount of loan-payments Twitter had to make this year alone dwarfs the losses Twitter had over the past decade.
That’s the equity. If someone were to buy Twitter for $19b, they would also be assuming $13b of debt, which means Elon thinks Twitter is worth $32b. LOL. It wasn’t worth that much when he bought it, which is why he tried to bail.
> “For people that don’t see our vision yet, people that don’t see what’s happening here at X, stop giving any of that oxygen,” she said. “Don’t pay attention to it.”
Does X pay its rent yet? Is that part of the Vision?
I read your comment using X with its historical meaning of "insert option here" instead of the rebranding of Twitter and it gave me one more reason to hate this stupid, stupid rebrand even as someone who doesn't use it.
Took Elon 17 years to get Tesla profitable... why do you think he'd give up in a year?
The largest problem with businesses these days is the "we must make profit next quarter" mindset and the "I hope he fails" is either that - or a pocket dislike of free speech. Each option is questionable in it's own right.
I hope Elon succeeds. Not because I agree with everything he says or does but because I value free speech.
“I disapprove of what you say, but will defend to the death your right to say it” -Voltaire
> I disapprove of what you say, but will defend to the death your right to say it” -Voltaire
I also just want to elucidate this quote a bit in case you didn't know.
Voltaire did not actually write these exact words. The line is a summary of his views on freedom of speech and thought, and it was penned by Evelyn Beatrice Hall in her 1906 biography of Voltaire titled "The Friends of Voltaire." Hall wrote this phrase to encapsulate Voltaire's beliefs on the subject.
Given that Voltaire himself did not say these exact words, there is no specific context in which he was addressing someone or some particular statement he disagreed with.
Voltaire was a man of the Enlightenment, which prioritized reason, evidence, and logical argumentation. He would likely have opposed the deliberate spread of falsehoods and deceit. However, he would also probably have advocated for the right of people to express even flawed arguments, as challenging such arguments through reason and debate is foundational to Enlightenment values.
But when it comes to personal attacks, slander, deceit, and hate speech, he would have not been so tolerant, because the subtext is when he speaks of "speech" he means engaging in an enlightened conversation using reason, evidence, and logical argumentation. It's okay to have flawed logic, evidence or reasoning, but he was fighting the powers at be of his time, and those were using deceit, irrational and illogical fallacies, appeals to emotions, forced censorship and the like to push falsehoods. The values of the enlightenment were about working towards accurate truth seeking.
I actually saw that when finding the quote but was too lazy to go deep into it. Yeah, it's not Voltaire quoted but her paraphrase.
I think free speech is like all our other rights - absolute but your rights end where the rights of others begin. Which is a wonderful paradox in which to live.
You have the right to self defense but don't have the right to own a nuke. You have a right to speak freely but not to defame/slander/incite violence. The question isn't are those rights yours but where your right ends and the line between your rights and mine.
It's still probably my favorite quote - especially as a veteran - even if, like a lot of things, its not exactly 100% accurate lol.
I should put it as "Voltaire, misquoted by Hall"
My other favorite quote is:
“When you tear out a man's tongue, you are not proving him a liar, you're only telling the world that you fear what he might say.” ― George R.R. Martin, A Clash of Kings
You don't truly believe Twitter has become any better at free speech than it was before do you? Cause that's foolish. There's tons of bans and blocks, and there's still bias in the algorithms for promoting tweets.
The only change is that what gets censored is now more aligned with Musk's own interests. That's all.
How could it not be better? it's not working with the US Gov to censor free speech that's proven to be true after the fact.
One of the biggest scandals of our time is "disinformation" that the government doesn't approve of being silenced by Government working with Private Industry to get around bans on government censorship of speech. Used for dissent around COVID "misinformation" or "election integrity".
I didn't claim X is perfect but it's a lot better than twitter that banned, say, the post for putting up The Laptop Story - that's long since been proven 100% true and was suppressed by... drum roll! the FBI literally lying about "russia".
The only thing that's changed is there's a top place for information that isn't controlled by the government - right or wrong.
I understand that's scary but scary freedom is better than the safety of slavery.
I'm sorry for doing this, but I'm going to defer to ChatGPT 4, as it does a better job than I could at explaining why I'm not convinced by what you're saying to believe it's any better now that Musk owns Twitter.
1. Instances of deceit, irrationality, or fallacious reasoning:
- The claim "it's not working with the US Gov to censor free speech that's proven to be true after the fact" suggests that because something is proven true later, it was necessarily censored for being true. This is a post hoc fallacy.
- Labeling disapproved "disinformation" as "literally the hallmark of fascism" is a slippery slope fallacy, as it makes an extreme conclusion based on limited data.
- The claim that Twitter banned "the post for putting up The Laptop Story" and connects it with the FBI "literally lying about 'russia'" makes an assumption of causation without clear evidence.
- The comparison "scary freedom is better than the safety of slavery" is a false dichotomy, suggesting only two extreme options exist.
2. Overt emotional appeals or attempts to manipulate the reader's emotions:
- Using terms like "biggest scandals of our time," "hallmark of fascism," and "safety of slavery" are emotionally charged phrases meant to evoke strong reactions from the reader.
- The phrase "drum roll!" is an attempt to heighten anticipation and add emphasis to the subsequent statement.
- "I understand that's scary" acknowledges the emotional weight of the topic, attempting to resonate with readers who might feel the same.
3. Summary of the Overall Approach:
The text primarily employs emotional appeals and fallacious reasoning to make its points. While it presents some claims as factual, it lacks concrete evidence or logical argumentation to support them. Instead, it relies on emotionally charged phrases and extreme comparisons to drive home its perspective. The text does not align strongly with Enlightenment values of reason, evidence, and logical argumentation. Instead, it leans heavily on emotional and manipulative tactics.
Edit (to add my rational for why I'm not convinced it's any better):
Like ChatGPT points out, the arguments against the prior Twitter and for the new I don't find fully logical or evidenced.
And in my view, the transition of Twitter to private ownership under Elon Musk pose challenges to its role as a guardian of free speech, compared to its time as a publicly traded company.
This change potentially alters the checks and balances in place, as the discourse and recourse now largely rest on Elon's discretion. And possibly on Elon's creditors, which some of them are questionable.
Previously, various stakeholders could critique and influence Twitter's policies, fostering a level of transparency. Now, this dynamic is gone.
So I'm left to take Elon's personal guarantee. To believe his claim that he's a good dictator. That he won't leave his personal beliefs and interests bias his platform. And to believe that it will end up being an overall net positive to truth seeking, and not devolve into another tool that helps falsehoods spread while truth erodes.
Even if he does manage to do all that for some time, being privately held isn't a robust mechanism to protect free speech and promote truth long term. If he worked to somehow democratize, create check and bounds, and all that, I'll change my mind.
"OpenAI also started responding to user backlash and regulatory pressure by censoring harmful ChatGPT responses, which may have led some users to abandon the tool, possibly viewing it as less useful, less trustworthy, or simply less fun."
Let me know when I can talk to a human again. I'm not here to talk to NPCs hiding behind Censored AI.
pre-post edit: noticed your edit.
"To believe his claim that he's a good dictator."
I trust Elon as a "good dictator" when compared to alternatives. (IE: Media working with the FBI to censor stories and influence elections by hiding truth)
Don't talk about the "robust mechanism to protect free speech" without being willing to talk about all the alternative to "Elon"... the US government? Other tech companies? Media? Who have all been proven to be willing to lie to keep a narrative?
Even if he has his flaws? (hint: he has many) The fact that he's not beholden to the US Government or other entities is in itself a step that we needed to break the silence about all the "conspiracy theories" that keep ended up being true.
Elon is faaaaaaar from perfect. He sure as shit isn't the one walking on water.... but he's waaaaaaay more trustworthy than most of the alternatives out there.
The US government is elected by you (assuming you're a US citizen). Public companies you can actually acquire shares in, and hold some control over. And there's a level of transparency in what they have to report to the public.
Elon, you're just blindly putting your trust and faith in him...
I'll never understand the tribal instinct people seem to have in blindly following a single authoritarian but convincing leader over a system that empowers you, has checks and balances in place, and federates the powers.
It's an opinion article, so I wasn't expecting much, but it seems a little disingenuous.
That said, an open-source platform more focused on decentralization would be a better solution, but nothing will be perfect while power and wealth are so centralized. I hope Damus is able to grow, but it's just not easy access enough as it is.
I generally dislike publicly traded companies and wish stock markets and speculation didn't exist, but there's no hope of that, so instead I'll cheer on any public corporation that goes private. I think using mass social media is largely bad for your mental health, but I hope the company succeeds in some capacity.
$19B ?! I think they forgot the comma here. And even that would be generous.
All advertisers are gone - it seems like most advertising is some absolute crap. No way it brings any real money. Linda Yaccarino was recently caught lying (or rather, presenting the state of affairs in Elon's way) - suggesting and even naming some big brands that are supposedly back, while they are not (or spend 0.1% of their previous spending).
Creators revenue sharing seems to be a 'fake it till you make it' attempt - with first payouts an order of magnitude higher than the last ones. And of course, it's completely opaque - nobody has any idea what the payouts are really based on. But hey, Twitter open sourced 'the algorithm' ! Even Elon fans appear to complain and realize that they may have been mislead.
We are definitely witnessing history in the making. A guy, that 4 years ago had a legitimate shot at becoming an absolute legend, decided to push his 'optimism' way too far (for which, I believe, he will end up in prison) and then on a whim, to buy Twitter for $44B, only to burn it to the ground.
There's absolutely no case to be made that it's worth anything close to $19B. I think we're seeing a reluctance to address the truth, Musk turned a slowly declining asset into a worthless one in a year.
Musk was always very 'optimistic' about Tesla goals and timeline estimates. That's fine (I guess) when you're a small company trying to achieve a major breakthrough. And they did actually deliver and started to mass produce EV cars - absolutely impressive result.
But in the process, Musk also started to promise more and more impossible things, on a bigger and bigger scale - FSD (almost 10 years ?), Robotaxis (!), Tesla's cars as 'appreciating assets', Boring Company, recently Optimus, AI, Tesla Semi, Cybertruck. Infinite demand that he claimed on investors earning call (he knew the real numbers) ?
The scale of optimism varies of course here. Tesla Semi for example ? Announced 6 years ago, officially started deliveries 1 year ago. In reality, those are prototype trucks, with specs and price being kept secret.
Another interesting one is the deal with Hertz - in October 2021, they announced a deal with Tesla, in which they supposedly bought 100k Teslas. Tesla stock skyrocketed (something like +50% in 3 weeks), to hit its all time high share price beginning of November 2021. It turns out (as announced by Hertz last week) that they only bought 35k Tesla's so far.
It's fine to say with huge optimism you're tackling a big problem when you're a 50 persons startup. It's another thing to say that you are in the process of building and close to delivering them as a huge public company, whose valuation is higher than 10 next competitors combined (when said competitors are doing >x10 sales).
And it's an entirely different thing, when the main character of the story, sells almost $40B of stock (!!!) at the peak of the hype he created. To give some perspective, $40B is the entire valuation of Ford, or GM. And he sold with excellent timing too. Remember this Hertz story - October 2021, then shares hit 400$ (all time high) beginning November 2021. Elon Musk starts selling on 8 November 2021.
As much as I would love to see Musk imprisoned, I don't see how those things would lead to jail time. Are you saying he might be accused of defrauding investors? I think that would be a pretty hard sell in court.
I did not say he should, I'm saying that I just think he will.
Well, all this optimism (and I omitted several other important misrepresentation of Tesla business, made by Musk) is looking like that - just too much optimism.
Keep in mind, their current valuation is based solely on those promises (or shall I say misrepresentation of reality) - they're not making that much money, their margin are contracting quickly, and they are a rather small carmaker as compared to others.
However, I'm betting that fast forward 3 years, Tesla share price tanks 90% from now (that would still leave it bigger than Ford !!!) and Tesla won't deliver any meaningful progress on all those 'optimistic' predictions, people's feeling about this period will be much different.
Edit: For what it's worth, Sam Antar (former CFO of the Crazy Eddie - a huge securities fraud. He's now working for the government) is also regularly picking on Musk - he's seeing a lot of red flags.
Also, for what it's worth, it's CFO was recently fired. Without any comments as for why.
I hope this is sarcasm. In the case that it is not: Musk's entire complaint was about Twitter acquiescing to government's content moderation requests. Since he took over, Twitter has complied with more government content moderation requests than before his arrival.
On top of that, he's very clearly just picking and choosing which accounts to treat with "FREE SPEECH!" (these tend to be far-right wing figures), and who to ban (these tend to be journalists who cover Musk)
Given he also destroyed the brand name and all brand value associated with it, this number still seems way too high. Especially when you see downloads have dipped drastically. Accounts that get payouts now just post nonsense trying to get engagement, it's like the "click fraud" of social media posting. No idea why any advertiser would touch it. To me Twitter was once the most valuable social media platform that no one could figure out how to monetize...now it's, I don't even know what it is now. Unless he's trying to recreate The Producers in tech, almost nothing he's done makes much sense.
> “For people that don’t see our vision yet, people that don’t see what’s happening here at X, stop giving any of that oxygen,” she said. “Don’t pay attention to it.”
Yes, don't listen to the outsiders who question the Vision. They're only doing so because they haven't purged themselves of their body thetans, yet.
There's a blurry line between over-enthusiastic corporate-speak, and cult-speak, and this is sitting somewhere on the line.
Musk made the offer just before a big drop in valuation of tech companies. Even if Twitter revenue remained stable it probably wouldn’t be worth $44B Musk paid.
With a drop in usage, drop in ads, controversy around the bots, misinformation, failure of Twitter Blue, I would expect that the actual value is quite below the said $19B.
Maybe the cost saving measures partially offset the drop in revenue? They crippled functionality for guest users quite a lot (I’m not logged in on my work laptop and I can’t see quote tweets nor replies), their workforce is 5x smaller, it seems their costs are way lower than before.
>Musk made the offer just before a big drop in valuation of tech companies.
Aren't most tech companies back near their ATHs? MSFT is above what it before that drop. Meta had the most notable crash but they're only ~20% lower than pre-that drop.
It wasn't worth $44B when he bought it, so I'm not sure why the NY Times would even use that number in any way. If I pay someone $100,000 for a stick they found on the side of the road, it doesn't make that stick worth $100k.
I doubt Twitter was worth $19B even before Musk overpaid for it. It was a 15 year old company that couldn't make money.
A stick that someone paid $100k for is absolutely a stick worth $100k - what people are willing to pay for things is how we assign them value. Twitter's stock was trading at ~$45/share before any rumors of acquisition - so somewhere around $35B - they'd made roughly $1B in net income in the year prior to the buyout. This meme about them "not making money" is so silly. Aside from a one-time settlement in 2020, Twitter had a very stable and fairly profitable business - hence why Elon had to pay $44 Billion to buy the company from the existing shareholders.
>twitters stock was trading for $45 a charge before any rumor of acquisition
What is this, alternate reality land? It was trading for $16 (albeit this was a low point) a share when Musk started his pump and dump scheme, which rocketed the value to 45 a share, which is the point that Musk decided he doesn’t want it and also began proceedings to dump stock.
There were ATH in the $45 range, but TWTR was on a clear downward trend.
You should maybe look at a stock chart instead of making silly, easily disprovable statements from memory like "ATH in the $45 range"? It nearly reached $80 in 2021... It spent several months above $60/share.
I don't have quick access to share prices older than Jan 1st 2019 - but from that date through the date of Elon's first share purchase on Jan 31st, 2022 - Twitter's average price was was $44/share.
I only went back enough to look at the Musk nonsense. So I guess I should have worded “the highs in the several months leading up to twitter were around $45, but twitter tanked and was still trending down at $16 when musk started attempting to manipulate the market”.
We aren’t talking about when musk first purchased shares. We’re talking about when twitter was trading at $16 when musk attempted to then manipulate the stock market by stating he’d buy twitter, which shot twitter back up.
You could make that argument except this is a stick someone said he’d pay $100k for to get attention, then the courts forced him follow through. Slightly different.
More like someone wrote a contract to buy a stick for $100k, took multiple steps including hiring bankers to raise financing to buy the stick for $100k, threatened to sue the seller of the stick if they didn't sell it to him for $100k and then eventually tried to back out..
> It wasn't worth $44B when he bought it, so I'm not sure why the NY Times would even use that number in any way. If I pay someone $100,000 for a stick they found on the side of the road, it doesn't make that stick worth $100k.
This is almost exactly how accounting works. Whenever they want to decide how much something is worth the answer is the most someone else would pay for it.
Doesn't make it less insane, especially in the presence of idiots with huge sums of money.
When you bought that $5 lotto ticket, it was worth $5. After the lotto is drawn, it's either worth approximately nothing or potentially a lot more than $5.
The cost of a therapist is in the ballpark of $100/hour, and Twitter is essentially anti-therapy in that one relieves psychological trauma and the other inflicts it, so to properly evaluate the profitablity of Twitter we must take into account that it should be paying its users $100/hour to use it.
But $26B seems like a pretty good tax write off. Seriously tho, How much of this drop (adjustment to reality) could Musk potentially write off on taxes, etc? Especially when it was pretty obvious he tanked it on purpose.
Until it's realized, nothing. If he sold Twitter tomorrow, he could take the $25 billion loss and not pay taxes on that much of his next capital gains, essentially saving him $5 billion, for a net loss of only $20 billion.
I'm not an accountant, but doesn't he need to realize investment losses in order to write them off? Capital expenses can be depreciated for tax write-offs, but I wasn't aware that corporate investments could be marked to market for write-offs.
Like most super-successful people, he's smart, hard-working, overconfident, and very lucky. His luck didn't work out for him this time when he overstepped his expertise. Survivorship bias made him think he'd be fine.
(Yes, it's very possible to be both smart and overconfident.)
Advertisers don't want to be on a platform that allows honest, open communication. A sterile non-controversial platform is much safer for them.
At some point as our rights and our freedoms in this country slowly erode, we're going to be grateful to have Twitter and to Elon Musk for being one of the last platforms to put our freedoms over sheer capitalism.
Nah, advertisers (and people as it turns out) don't want to be on a toxic platform where they're constantly harassed. Advertisers don't want to be seen as endorsing the cesspool. This isn't about free speech, it's about being free from constant harassment and people not wanting to swim in the sewer. Musk has turned xitter into 4chan: sure teenage boys like that kind of thing, but pretty much everyone else finds it unpleasant which is why they're leaving.
From the recent stuff, remember the lab leak theory where any mentions of which were getting removed from Twitter, Facebook and Youtube, including the scientific papers that looked into it?
Not being able to see replies without logging isn’t putting freedoms over capitalism. Twitter Blue replies pushed to the top of threads isn’t putting our freedoms over capitalism.
> At some point as our rights and our freedoms in this country slowly erode, we're going to be grateful to have Twitter and to Elon Musk for being one of the last platforms to put our freedoms over sheer capitalism.
Last year, Twitter’s interest expense was about $50 million. With the new debt taken on in the deal, that will now balloon to about $1 billion a year. Yet the company’s operations last year generated about $630 million in cash flow to meet its financial obligations.
That means that Twitter is generating less money per year than what it owes its lenders. The company also does not appear to have a lot of extra cash on hand. While it had about $6 billion in cash before Mr. Musk’s buyout, a large portion of that probably went into the cost of closing the acquisition.
...
To make ends meet, Mr. Musk probably has to slash costs — by a lot. Over the weekend, he was said to be already moving to do so by ordering job cuts across Twitter. One investor who put less than $1 million in the buyout of the company said he was told by the head of Mr. Musk’s family office to expect that around 50 percent of Twitter’s 7,500 employees would be laid off.
https://www.nytimes.com/2022/10/30/technology/elon-musk-twit...