The sad thing is this guy will light $44B on fire, probably lose 99% of it, and not even feel it.
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$33 Billion.
$13 Billion (of the $46 Billion deal) was loans from banks to Twitter.
-$2 Billion of debt IIRC before the deal + $13 Billion from banks + $33 Billion from Elon Musk == $44 Billion (46 billion - 2 billion prior debts).
I cannot imagine all of the investors taking this laying down.
protip: corporate debt is not the same thing as out of pocket debt, no one is understanding this lol
Maybe rather than "lol"ing at people for not understanding something, you could explain the important differences ?
Help them understand by explaining it, then.
If Musk were a clever or brilliant thinker, as some people still believe despite all available evidence, one could assume that he has some master plan or that he’s making strategic decisions about the scope, scale, design and functionality of the service. He is not. He has not. He is running Twitter into the ground like Donald Trump ran the US government – fueled by fits of indignation and paranoia.
On the next season of The Sopranos reboot:
Since the day he proposed taking over, Musk has demonstrated no interest or expertise in how such a service might enhance the lives of its users or at least make money to stay afloat. He’s run it on debt – debt accrued from some of the most dangerous people in the world.
With the new debt Musk took on to complete the purchase of Twitter stock and take the company private, the company’s annual debt payments ballooned to about $1bn a year. Yet the company’s operations in 2021 generated about $630m in cashflow.
Get your popcorn ready.
Oh no!
anyway
It just baffles me why he would buy Twitter in the first place and even more so why he paid what he did for it. PayPal -> Tesla -> SpaceX -> Twitter. How does that make any sense in any way. So there’s that from the start, but then why is he firing a torpedo into it. Was his secret plan to bulldoze Twitter from the start? That’s a lot to pay for revenge.
The short of it:
He made an offhand comment about buying twitter as a sort of “joke” but was then forced to go through with it thanks to the legal ramifications of said joke.
Is it, though? I’m still waiting for the guys I’m following to move on, like Scott Manley for example.
Pretty much this. The whole of (popular American) sports is entrenched in Twitter. They aren’t going anywhere unless forced to do so.
My kid plays football and has aspirations to play in college. Every person has told him to build a prescience on Twitter as that is what all the recruiting coaches use and look at.
I think tech people don’t understand how social media supports non-tech areas.
Maybe it’s time to move on from creators who insist you use a dieing platform with a shitty user experience? The medium is the message.
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Threads is the only thing I’ve seen with enough name recognition to get those big, non-tech oriented accounts to move. I’ve seen so many people I follow on Twitter post about Threads in the last day or two that it is insane. The only thing close to that hype is Bluesky, but it being invite only now is limiting its growth.
Exactly.
This is Elon hate-porn. Some people LOVE to hate on Elon and make it out like every misstep he does is a DISASTER AND THE MELTDOWN WILL HAPPEN ANY MINUTE NOW!!!. No it’s not. Twitter is alive and well. Some heavy users are pissed I’m sure. But the whole ‘running it into the ground’ thing just isn’t happening.If you disagree, my answer is simple- try using it. It works. Articles like this paint an awful picture of a service circling the drain that’s gonna go bankrupt any minute now. It’s clickbait, an article trashing him pandering to a bunch of people who hate him and want to see him fail.
To be clear- I disagree with a lot of what Elon’s doing at Twitter. I understand he wants to monetize AI scraping, but I also think that if he wants Twitter to be the ‘public square’ it has to stay, you know, public. As in no registration required, Google can index.
But I have no need to hate on the guy. If he runs Twitter into the ground or pisses users off too much, Mastodon and other fediverse platforms win. If he succeeds, then good for him. No skin off my back either way.
No it’s not. Twitter is alive and well.
It’s alive and if it dies, its death won’t be for technical reasons. It will be enough advertisers abandoning it for his creditors to force him to get something from it and sell it. But so far it is hanging in there.
To be clear- I disagree with a lot of what Elon’s doing at Twitter. I understand he wants to monetize AI scraping, but I also think that if he wants Twitter to be the ‘public square’ it has to stay, you know, public. As in no registration required, Google can index.
This AI scraping excuse sites like Twitter and Reddit are using is so disingenuous. This scraping isn’t new and hasn’t increased to the level where it is costing them anything. It’s just it now has hype and a price tag around it so they want their cut.
I don’t see Elon selling Twitter. He’s too far in. He paid $44bn for it, by most estimates it’s probably worth half that today (both due to lower traffic and Elon seriously overpaying from the start). So if he sells, best case scenario he takes a 50% haircut. Crazy or not he has a plan for the thing, so he’s gonna do his plan and if it works he’ll make a bundle and if not then it’ll shrink a lot. But I see him hanging on to it with a skeleton crew before he sells it.
This scraping isn’t new and hasn’t increased to the level where it is costing them anything. It’s just it now has hype and a price tag around it so they want their cut.
Well yeah, that’s what I meant. The costs of having someone scrape the database are essentially zero for Twitter/Reddit. The lost opportunity cost however is astronomical. Reddit and Twitter both are sitting on an incredibly valuable database of genuine interactions. And I understand not wanting to give that away for free.
Problem is, it’s too late. Reddit and Twitter have both been scraped already. So locking barn door after horse has left just pisses off the users.I don’t see Elon selling Twitter. He’s too far in. He paid $44bn for it, by most estimates it’s probably worth half that today (both due to lower traffic and Elon seriously overpaying from the start). So if he sells, best case scenario he takes a 50% haircut. Crazy or not he has a plan for the thing, so he’s gonna do his plan and if it works he’ll make a bundle and if not then it’ll shrink a lot. But I see him hanging on to it with a skeleton crew before he sells it.
I don’t think he’ll sell willingly. I just could see a scenario where his creditors who paid for a large part of it demand to see some return on investment and force him too.
Well yeah, that’s what I meant. The costs of having someone scrape the database are essentially zero for Twitter/Reddit. The lost opportunity cost however is astronomical. Reddit and Twitter both are sitting on an incredibly valuable database of genuine interactions. And I understand not wanting to give that away for free. Problem is, it’s too late. Reddit and Twitter have both been scraped already. So locking barn door after horse has left just pisses off the users.
Agreed. The fact that especially Reddit, but a lesser extent Twitter have been unable to monetize genuine human posts and all the data that gives (Reddit is basically the only way to make Google useful nowadays and Twitter is basically the only place to go for breaking news) seems negligent to me.
But like you said, the horse it out of the barn. There’s no getting back that lost potential value.
I don’t think he’ll sell willingly. I just could see a scenario where his creditors who paid for a large part of it demand to see some return on investment and force him too.
I think for that to happen, 1. value of TSLA would have to drop a lot making creditors question his ability to repay, and 2. value of TWTR would have to remain relatively high. Right now TSLA is rising and TWTR valuation is falling so if I was a creditor I’d much rather hold Elon debt than a piece of TWTR.
Agreed. The fact that especially Reddit, but a lesser extent Twitter have been unable to monetize genuine human posts and all the data that gives (Reddit is basically the only way to make Google useful nowadays and Twitter is basically the only place to go for breaking news) seems negligent to me.
Reddit / Twitter / Facebook / etc haven’t found any creative way to monetize the numerous genuine interactions on their platform other than data mining them for ad targeting. So they double down and triple down again on that- Facebook went creepy and might as well be a credit bureau, Reddit tried to stay non-evil for a while, Twitter just kind of did their own thing and burned cash and never really made money but investors stayed in because a company that big has to eventually make money somehow.
Now they all say HOLY SHIT WE ACTUALLY HAVE SOMETHING OF REAL VALUE TO SELL!!! and see AI training as their winning lottery ticket.What strikes me though is how un-creative it all is. Here’s a bunch of the most important databases in human history and the best they can think up is ads and AI training?
And they all do the same thing- grow into huge companies with tons of distraction side projects and middle managers that burn cash, then wonder why they aren’t profitable.
Elon saw that with Twitter- to run Twitter you need server people and developers and ad salespeople and the rest of them probably did little of use. Same thing is probably true with Reddit though. Reddit has like 2000 employees. What the hell do they all do? It sure as hell isn’t productive development. I’d bet money they have a ton of useless middle management.Any one of these companies (IMHO) would do much better trying to be a utility more or less. Make it easy and cheap/free for everyone, but keep operating costs down. Make a little money off a lot of people. And do what Reddit would do if they had two brain cells to rub together- pay us a fee and you are the customer and can use the thing however you want; or don’t and you see a ton of ads.
Can’t tank fast enough, imo.
Adios!
The money quote:
While Musk tried his best to distract critics by blaming artificial intelligence companies allegedly scraping Twitter, a glitch in Twitter itself meant its computers were demanding data from its servers in an infinite loop.
So Twitter was killing itself. It seems to be a mercy killing.
Good article.
