Musk may fire 75% of current Twitter employees

[Nova78]

Musk's debt from this will be $1B per year. That’s not serviceable on current Twitter earnings - not even close. Is this Elon’s MySpace? Q2 Twitter has $1.1B revenue and $1.5B expenses with a net loss. Musk can cut cost but if his revenue tanks, that doesn't help. Losing advertisers is a huge concern. So, either bank taking a haircut, his big money backers or his TSLA holding. Any bets? I'm betting Tesla. Which is probably why Tesla investors are really worried and really pissed about this.

Losing advertisers is a huge concern.
Yea those blackmailing Democrats sure stuck it to hobby lobby,gova and chick-fil-a.
Asshat

 

[CarlinAnnArbor]

@frigi

Interesting:

Twitter Founder Jack Dorsey Launching Test Of Rival Social Network

Just in time for Elon Musk's purchase of Twitter for a cool $44 billion.

www.yahoo.com

Blue sky

 

[Synthaholic]

This is an excellent thread explaining Musk's predicament. From an unusual source, too: Father Ballecer, a Jesuit priest at the Vatican. He's a very sharp young man, and I have been following him on Twitter for a while now. The thread contains charts that I'm not going to bother reproducing here, along with all of his sources for these figures, so go there if you're interested.



Now that block bot has had time to do its thing, here's a dispassionate look at the Twitter deal.

The purchase price was north of $44b. That amount was raised w/a combination of $12.5b in financing, $21b in equity, & the remainder from a loan secured against his Tesla stock.

A few notes:

First, the loan is secured on stock that is down from $361 at the time of the original deal to $228 yesterday, a 37% drop.

Why is that drop important?

As the loan is secured AGAINST Tesla stock, he had to commit MORE stock than he originally negotiated.

Further, he's likely using the same loan agreements that he's been using to fund a cash-poor, stock-rich lifestyle (not unusual among the wealthy) - meaning that the bank can FORCE him to sell stock or cover the difference w/more stock/cash if the price drops.

This creates a precarious financial balance:

If Twitter doesn't earn, that will negatively affect Tesla stock prices, which could force a cover w/more Tesla stock or cash which would put further downward pressure on Tesla stock.

You know that scene from the HBO miniseries "Chernobyl" where Valery explains to the court how a "positive void coefficient" created a self-reinforcing buildup of heat that ended w/the #4 reactor blowing itself apart?

Musk has that as ~1/4 of his Twitter financing.

Second, in addition to the purchase price, Musk now pays the buyout packages & fully-vested stock prices of the employees he wants to fire.

For JUST the top three executives he's already fired, that's ~$200 million. That gets added to the debt which goes on Twitter's books.

Third, Musk isn't going to take on Twitter's debt as personal debt. That means it goes on Twitter's books, which already weren't looking too good.

Operating at a loss for most of its history, Twitter has JUST started to eek out profits, but now that's not enough.


Conservatively, financing that debt will cost about $1b a year.

Last year, Twitter lost $221m. The year before, $1.1b. Covering that debt doesn't look likely in the short term.

Musk said he plans to double revenue within three years, but that says nothing about PROFIT.

Fourth, ad sales account for about 92% of Twitter's revenue.

Those ad sales only went up once Twitter started aggressively going after troll and bot accounts.

No brand wants its ads posted in a stream of people writing the worst-possible thing they can think of to write.

This is why, even though Musk courted the "burn it down & post everything" crowd, his statements to the advertisers - that it WASN'T going to be a free-for-all-hellscape - are quite the opposite.

Musk can't forever finance the debt w/o any hope of seeing a return on investment
.
Doing so would endanger not only Twitter, but Tesla & all its connected companies. (See #1)

Musk knows that Twitter needs to EARN.

To earn, it needs ADVERTISERS.

To have advertisers, Twitter CAN'T be another Parler, Gab, Gettr or Truth.

Now we have a better picture of the buyout:

- Musk bought a business w/dubious profit prospects

- promising changes that could destroy the revenue it already has

- to court an audience who will turn on him if he DOESN'T

- W/a positive void coefficient of financial hardship

To be fair, Musk can pull it off.

I'm a financial dilettante who hasn't seen the inner workings of Twitter.

Maybe he sees a quick way to turn around the company & stave off financial Armageddon.

Maybe he has a pivot will greatly widen revenue streams w/o driving up costs.

Maybe he's playing a long game & is willing to live with a financial Sword of Damocles to see through something he thinks is important.

But to an outsider, it looks like a rich man bullied himself into making a bad deal.

Still, he is right in saying that Twitter has a big part to play in discourse around the world.

Sure, we can all move elsewhere, but first I think we watch what he does.

I can honestly say, good luck Mr. Musk

 

[HenryBHough]

Watch him clean up dumping Tesla stock as liberals rush to "save the planet".

 

[berg80]

 

[krichton]

One company. Oohhh. Advertisers will go to Musk on name recognition alone. As well as the fact that with conservatives being allowed to speak, that means more traffic and more eyes on their product. Let me know when Musk runs out of money and there’s no advertisers. Swing and miss again moron.

More conservatives talking is a reason for advertisers to leave twitter.

 

[JGalt]

More conservatives talking is a reason for advertisers to leave twitter.

Then those companies should be boycotted.

 

[Zincwarrior]

Then those companies should be boycotted.

That is your free speech right to do. I flirted with twitter for few days after Musk bought it to see what the fuss was, but its just looks like people ranting about each other to me. I'm probably missing something about it, but its just boring. If I want ranting I can go talk to a homeless guy or one of the other mods (who am I kidding, thats the same thing).

 

[Likkmee]

Musk is talking out his ass again. Firing 75% of employees would do massive damage to the platform, scare away advertisers, and never turn a profit.

Good write off !
He should buy tRump Vodka too

 

[JGalt]

That is your free speech right to do. I flirted with twitter for few days after Musk bought it to see what the fuss was, but its just looks like people ranting about each other to me. I'm probably missing something about it, but its just boring. If I want ranting I can go talk to a homeless guy or one of the other mods (who am I kidding, thats the same thing).

How is that any difference from USMB? And yet, you're a moderator.

 

[Blaster]

More conservatives talking is a reason for advertisers to leave twitter.

So you'd favor more liberals talking?

 

[Zincwarrior]

How is that any difference from USMB? And yet, you're a moderator.

Exactly. At least here the conversations can be longer and the insults are free.

 

[Flash]

More conservatives talking is a reason for advertisers to leave twitter.

The stupid woke oppressive Libtards running Twitter was a reason for Musk to buy it and make it a free institution.

"Hey lets ban The Babylon Bee from Twitter, what could possibly go wrong?"

It is good to have a nice little stash of "fuck you" money, isn't it?

 

[lantern2814]

More conservatives talking is a reason for advertisers to leave twitter.

So sorry ending censorship of conservatives gives you the sads. No, not really.

 

[Skylar]

Yes this belongs in Politics because there has been no transaction in recent history that has created more political reaction waves than Elon Musk's saga of becoming the primary, even sole owner of Twitter. It is talked about across the internet, on social media, in Congress. . .

And now it is being reported that his intent is to reduce the existing Twitter workforce by 75%. This is an economy move as Twitter currently nets between $1 and $2 billion per year compared to Facebooks almost $40 billion per year.

Those supporting this initiative generally come from the aspect that it will be mostly those scouring Twitter for rightwing accounts to censor or suspend who will be let go. (We don't know that, but that's the scuttlebutt.)

Those opposing it mostly seem to be afraid there won't be as much censorship or suspensions of those account on the right though they never say it quite that way. Their terminology is that there won't be as efficient monitoring of 'harmful' or 'misleading' information which is how they characterize the tweets of MAGA or others on the right.

Some like me would welcome ability for those on the right to exercise free speech without having to be so careful of each word or phrase, but my concern is there won't be censorship of the radical extremists on the right who just tweet insults, slurs, talking points, false memes etc. which are not at all helpful and are often detrimental to the MAGA public image and agenda.

Elon Musk Plans To Give Pink Slip To 75% Of Twitter Employees: REPORT

Elon Musk is reportedly planning to let go almost 75% of Twitter's 7,500 employees upon closing a deal with the company to become its sole owner.

dailycaller.com

This is a pot roast scenario. Its gonna make its own gravy.

Elon will either stop attacking his employees and advertisers and limit hate speech on his site.

Or he'll drive the company into bankruptcy under the weight of technical glitches, lack of revenue and being deplatformed on Apple and Google.

Either works for me.

 

[Foxfyre]

This is a pot roast scenario. Its gonna make its own gravy.

Elon will either stop attacking his employees and advertisers and limit hate speech on his site.

Or he'll drive the company into bankruptcy under the weight of technical glitches, lack of revenue and being deplatformed on Apple and Google.

Either works for me.

Elon has attacked nobody. And if he did drive the company into bankruptcy or just closes it, he is still the richest man in the world. I wish people judging Elon had half the interest in the entrepreneur trying a new business or the mom and pop businesses just trying to keep their heads above water.

What has Elon ever done to you? How has he complicated or made your life worse in any way? What do you think he is going to do that will be a threat or danger or damaging to you or anybody else?

By what authority, experience, or credentials do you presume to judge him or dictate what will happen to him?

 

[Skylar]

Elon has attacked nobody. And if he did drive the company into bankruptcy or just closes it, he is still the richest man in the world. I wish people judging Elon had half the interest in the entrepreneur trying a new business or the mom and pop businesses just trying to keep their heads above water.

What has Elon ever done to you? How has he complicated or made your life worse in any way? What do you think he is going to do that will be a threat or danger or damaging to you or anybody else?

By what authority, experience, or credentials do you presume to judge him or dictate what will happen to him?

He's called his workers lazy, he's insisted that his advertisers hate free speech. Yes, he's attacked them both.

Half of his largest advertisers have left the platform...who account for about $750,000,000. There have been massive drops in revenue. That's how I presume to judge him. Twitter is worse off under Elon so far, than it was before he took over.

Elon is superb example of why folks call MAGA culty. Elon's tenure so far has been an obvious disaster. He's eliminated much of Twitter's capacity to innovate or even maintain what they've got by firing the majority of the employees. He's lost the trust of many of his advertisers, sheparded a stark spike in hate speech on the platform, and incompoetently implimented one poorly thought through initiative after another.

Can he pull it out? Maybe. But by any objective measure, its been a dumpster fire for the last month.

And still your ilk furiously polish Elon's turd, ignoring all of the poor performance, the incompetence, the missteps.

Why?

 

[Foxfyre]

He's called his workers lazy, he's insisted that his advertisers hate free speech. Yes, he's attacked them both.

Half of his largest advertisers have left the platform...who account for about $750,000,000. There have been massive drops in revenue. That's how I presume to judge him. Twitter is worse off under Elon so far, than it was before he took over.

Elon is superb example of why folks call MAGA culty. Elon's tenure so far has been an obvious disaster. He's eliminated much of Twitter's capacity to innovate or even maintain what they've got by firing the majority of the employees. He's lost the trust of many of his advertisers, sheparded a stark spike in hate speech on the platform, and incompoetently implimented one poorly thought through initiative after another.

Can he pull it out? Maybe. But by any objective measure, its been a dumpster fire for the last month.

And still your ilk furiously polish Elon's turd, ignoring all of the poor performance, the incompetence, the missteps.

Why?

Stating the obvious is not attacking anybody. Why are you attacking Elon? What has he ever done to you?

 

[Jim H - VA USA]