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it's wild that Musk was trolled into paying $44B to destroy a perfectly viable company.
by bikeshed 4y ago
it's wild that Musk was trolled into paying $44B to destroy a perfectly viable company.
- dilyevsky 4y agoHis determination to set his 44B on fire is commendable
- jesuscript 4y ago[flagged]
- deleted 4y ago[deleted]
- jsonne 4y agoLosing 200 million a year and mostly being not profitable is viable? Edited to say "mostly" not profitable.
- stefan_ 4y agoNo, having enough cash in the bank to continue on for another 10 years (as Twitter did) is viable. Viable is not "making profits".
- suprfsat 4y agoThey certainly could do worse.
- _jal 4y agoLike owing $1B/year in interest?
- dragontamer 4y agoAnyone got real numbers for the debt? Grade CCC bonds are well above 16% these days, and the amount of debt is $13 Billion. This very well could be $2 Billion/year interest payments. I remember reading rumors of ~10% since the debt was signed in April 2020 and rumored to be 50% fixed and 50% adjustable. But I never actually found the real information or confirmation. I think it's safe to say that the interest payment is somewhere between $1 and $2 billion, but there is also principal that needs to be paid back, right? ----- That's not counting whatever debt Elon did to get his $33 Billion portion of the bill. I'm just looking at Twitters debt they now owe Morgan Stanley (and a few other banks) as part of the $13 Billion leveraged buyout portion of this company purchase.
- rockinghigh 4y ago> 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. https://www.nytimes.com/2022/10/30/technology/elon-musk-twitter-debt.html https://www.nytimes.com/2022/10/30/technology/elon-musk-twit...
- PubliusMI 4y ago
- Imnimo 4y agoDidn't Twitter post like a billion in profits in 2019?
- fbdab103 4y agoAmazon went 14 years before posting a profit. Not that I think Twitter was necessarily investing revenue correctly, but a business can go pretty far even in the red.
- YetAnotherNick 4y agoBecause Amazon was spending on R and D. AWS came as a result of that. Amazon's core business was known to overspend(still do) just for customer's satisfaction, and it was very clear Amazon could turn into profit any day they want. Same is not the case for Twitter.
- kevinh 4y agoTwitter spent more than a billion dollars on R&D in 2021, which more than eclipsed its net loss.
- yazaddaruvala 4y agoDifference is Amazon spent a lot of it on durable infrastructure (datacenters, servers, fulfillment centers). I don't know how Twitter spent its money, but seemingly on undifferentiated software (i.e. not durable) or moderation? Both of which are recurring expenses.
- wongarsu 4y agoThe difference is that Amazon made plenty of cash, and chose to reinvest all of it. For nearly all of those 14 years they could have just decided to be profitable, if it had been advantageous to do so. I don't think Twitter is in the same position at all
- _jal 4y agoI think it is fair to say that left to its own devices (that is, pretend the last year of disruption and then this hadn't happened), Twitter could have become profitable enough to muddle on. Everyone knew they had too many employees, and that big money-making possibilities... don't seem to be there, due to the nature of the niche they've carved. But they had a lot of money in the bank, so they didn't need to make any sudden movements. Sensible downsizing and incremental improvement of the bottom line, and, yeah, that's a viable business. It may not be super exciting, but if you want exciting, head south on 101, Meta is about 40 minutes out depending on time of day.
- type-r 4y ago16 years isn't enough time to figure out a profitable business strategy? How much longer would you have given them?
- ClumsyPilot 4y agoBusiness thats covering its costs doesn't need anyone to give them anything. They just have to survive. They were surviving. They could turn no profit in a hundred years, and thats fine.
- type-r 4y agoA business that does not turn a profit pretty explicitly does need people to give them money though right?
- ClumsyPilot 4y agoit can be cash neutral
- deleted 4y ago[deleted]
- Whatarethese 4y agoTesla historically has not been profitable until recently and they are getting help from carbon credits.
- kypro 4y agoWere they ever even profitable?
- bikeshed 4y ago2018 and 2019 apparently
- rufusroflpunch 4y agoLayoffs were always coming, whether Musk bought it or not.
- twelve40 4y agoit's funny how he got so much shit here a week ago, but now everything just started tanking, stripe layoffs, lyft layoffs etc etc apparently he was into layoffs before it was cool
- deleted 4y ago[deleted]
- refurb 4y agoDo you have a crystal ball? How do you know how things will turn out? I mean, it's not like Twitter had some amazing business plan going forward.
- rybosworld 4y agoMusk made a bad call for sure. There's no obvious path to recouping that investment. But calling twitter a "perfectly viable company" is part of the problem. It's comments like this that inflate the bubble. Twitter has thousands of employees who have done close to nothing for at least several years. Facebook/meta are at least trying new things. Twitter seems to be afraid to make any decisions at all.
- unity1001 4y ago> Musk made a bad call for sure. There's no obvious path to recouping that investment. You people really miss the bigger picture from the business side of things - Musk now owns the most impactful social network on the planet. Having an additional $44 billion in wealth does not bring you anything that is actionable. Its just inert wealth. Only when its used, wealth actually becomes something meaningful. And Musk bought the biggest social network on the planet with that money. At this moment, he can do anything from boosting his own projects and businesses through Twitter to creating entirely new paradigm like making Twitter into a Western Wechat. (Im obviously not counting Facebook as a top social network at this point) > Facebook/meta are at least trying new things Meta is banking on something that may or may not materialize. Its a gamble. Musk is going to copy what's already successful elsewhere.
- rybosworld 4y ago> You people really miss the bigger picture from the business side of things - Musk now owns the most impactful social network on the planet. This is an extraordinary claim. Most impactful as measured by what? Twitter isn’t even in the top 10 for dau/mau. They are almost exactly the same size as reddit in terms of active users. > (Im obviously not counting Facebook as a top social network at this point) That’s just being unreasonable.
- bombcar 4y agoImpactful in how many of those other social media sites consist of links to Twitter I presume.