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.
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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.
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...