Hm. So who owes the debt? What's the collateral? Supposedly Musk bought Twitter personally, but this looks like a leveraged buyout in trouble.
The banks involved had a "sell-down letter", an agreement between the lenders that any sell-off gave the other lenders a right to participate at the same price. That expired ten days ago.[1] The interest charge is about $1.5bn/year now. A big question is how long those loans run at the old interest rate. Rates are higher now. Total revenue from X is said to be about $1bn/year, not that anybody outside really knows.
[1] https://finance.yahoo.com/news/exclusive-banks-funded-elon-m...
IIRC Twitter LBO bonds were getting an average of 9.6% YTM when raised, and had maturities from 2027 to 2030. Selling at 90-95 means an increase in the yield of about 2% (napkin math says 1%-5%).
Original debt of twitter buyout lost x%, with this latest sales it down overall to y%?
Judging by how much stock Elon had to sell, plus the loans/equity raised for the initial purchase, it feels like an all-round bad decision.
From another perspective, judging by how X played a huge role in the 2024 election & Elon's new role as First Friend, maybe his rapidly improving fortune factors into the calculus.
Of course it does! Why do you think Elon was complaining about the article so much?
Although that's based on a very distant view of his actions, maybe in private he's 100% on board.
Do you mean from when Musk purchased it?
https://www.businessofapps.com/data/twitter-statistics/
Looking at the revenue growth, does anyone know why it increased in value to the degree it did leading up to its sale? I recall there was some discussion around the amount of bots (not the existence, the degree).
Pre-sale:
https://www.pewresearch.org/internet/2018/04/09/bots-in-the-...
https://www.pewresearch.org/short-reads/2018/04/19/qa-how-pe...
During the process:
https://www.cpomagazine.com/cyber-security/we-checked-elon-m...
I wonder to what degree bots are still influence the platform. For that matter, it would be nice to know how bad the problem is on Reddit.
Thing is, as a public company, Twitter's revenues were public, amounting to $5.229B/yr (i.e., up to the sale). And, the New York Times reported they were doing $114M/quarter in early 2024. Annualized, that's $456M per year. So, an 87% revenue decline if we compare X's self-reported revenues against Twitter's last public disclosures before being acquired.
That wasn't the plan, to be sure. But whatever the plan was originally, it is now secondary.
Apparently it sort of was worth it for Musk, but it cost him, and is going to cost further down the line.
As I understand it, Twitter is breaking even given all expenses, which means that they should not have problems paying back their debt. In which case, the investment seems solid. If we were talking stocks, I would understand it.
If it’s really worth 95%, it’s only held up by the political situation and investors’ general Elon bubble.
What I've heard is the opposite, that the cost of servicing interest on the loans they now have exceeds 100% of their total revenue.
(Not profit, revenue: even if they cut absolutely every other cost to zero they'd still be losing money).
Source? Is this true?
https://www.wsj.com/finance/banking/wall-street-banks-prepar...
Eh, he bought the White House for $40bn. I say that's a very good purchase, given how he can now leverage it to get better deals for his business. E.g. Greenland for resources to make batteries.
* And don't have a link to whatever it was, so take with a cyber truck full of salt!
That's it, it's even said in the article. Everyone know that Elon musk in the us government and him being buddy buddy with Trump is like inviting a wolf into a lamb's den.
44 billion was a pretty small price to pay for the ultimate propaganda bullhorn.
The investors backed Elon Musk, a man with a long history of picking fights with the SEC, breaking labor laws, and being a manchild - why would they expect something different?
https://www.wsj.com/tech/elon-musks-twitter-takeover-is-now-...
Elon Musk email to X staff: 'we're barely breaking even'
During Musk's acquisition, Twitter officially stated that around 5% of the platform was bots; Musk tried to back out of the deal because he believed the methodology used to get to that number to be bad. On one occasion he stated an estimate of 20%, but said it could be "much higher". Anyone who spends any significant time on X, post acquisition especially, is likely to agree with the "much higher" part of that.
(Remember this: Any time he's on Joe Rogan or talking to anyone who thanks him for his "service to America" by purchasing Twitter: Elon Musk did not want to buy Twitter. He realized it was a bad purchase very quickly, and tried to weasel out of it multiple times. He is a low-intellect coward who makes bad decisions, but he does surround himself with people who can clean up the repercussions of his bad decisions.)
Estimates of how many total active users (humans + bots) are on X vary wildly; Musk has said "600M monthly active" as of May 2024; but as of Oct 2024 SOAX estimated something more like 335M, with 105M in the United States [1]. Depending on what numbers you believe and what percentage you believe to be bots, this means there's anywhere between 10M-80M American Humans logging in to X on a monthly basis. The disparity between this number and the other major social networks is harrowing [2], as is the direction their user count [3] and advertiser count [4] is heading.
The xAI ambitions are also, put simply, bad decision making; which should come as no surprise given Elon Musk is not good at making decisions. AI is commoditized, and the majority of value in that space right now is being created in enterprise B2B, not B2C. xAI has no B2B plan; the combination of ChatGPT, Gemini, and Apple Intelligence rule the B2C zeitgeist, and there's literally nothing differentiating xAI to justify its high price tag. xAI has no integration with the hardware people are buying (until they start shipping it to Teslas; that's when you'll know its over for Musk); nor do they really have control over the software.
The only shred of value X has left is Elon Musk's personal connection to the President; yet he made it 3 days into the new Presidency before publicly ripping apart a major policy objective of the Trump administration; one that is well-aligned with his own business interests, because of a personal feud with Altman [5]. It seems very likely to me that Musk will self-sabotage that relationship within the first year. If the new purchasers of this debt believe they can use it to control him and leverage that relationship, they should be reminded that Tesla tried for years to get control of his Twitter shit-posting, and no one could. He cannot be controlled, and he has a demonstrated and catalogued history of engaging in public self-sabotaging behavior despite good and friendly counsel.
X's bot problem isn't only an issue for its advertisers and revenue; human, American ears listening to the things Musk posts is why the platform has value for Trump.
[1] https://soax.com/research/twitter-active-users?utm_source=ch...
[2] https://datareportal.com/social-media-users
[3] https://mashable.com/article/elon-musk-x-declining-user-base...
[4] https://www.cnn.com/2024/09/05/business/advertisers-x-withdr...
[5] https://fortune.com/2025/01/24/donald-trump-sam-altman-opena...
Maybe you should collapse the number of items you have an interest in formulating an opinion on so that you can give more attention to those things that you can provide something that adds to the discussion.
