Hi and welcome to another episode of the Elon Musk podcast
where we delve into the latest developments in the world of
Tech, Finance and innovation. In this episode, we take a deep
dive into the financial challenges facing Elon Musk and
is social media. Acquisition of Twitter now is
one of the world's most influential Business Leaders.
Elon Musk is facing immense, pressure to turn Twitter into a
profitable business and despite musk's ambitious plans for the
Platform. Twitter continues to struggle
with a high cost, debt burden and a decline in Revenue.
So, join us, as we explore the future of Twitter, under the
leadership of Elon Musk. Now, Twitter's kind of facing an
existential crisis right now, Elon Musk, the company's owner,
and CEO Under Pressure to turn the social media platform me to
a cash flow, positive business, and nearly five months after
musk's forty four billion dollar.
Take over Twitter is Still burning through cash, in the
company's financials remain strained, due to an Advertiser,
pull back and high-cost debt. Now, to stem, the cash burn musk
is taken aggressive steps to cut costs, including reducing
Twitter's task force by about 75%.
Now, speaking at a Morgan Stanley conference musk said,
Twitter has a shot at being cash flow positive in the second
quarter and analysts and academics agree that this would
give him the The time he needs to develop and build out, new
revenue streams. Now, Twitter has to keep up with
quarterly. Interest payments are the 13
billion, dollars of debt that helped pay for musk's purchase
of the company. It had less than 600 million
dollars in net debt before the Takeover and the company has to
pay 1.5 billion dollars a year in interest costs while its
annual operating costs are now close to 1.5 billion dollars.
Now Twitter has also been hit with lawsuits from landlords
consultants and vendors who claimed that Twitter hasn't paid
its bills and Twitter told investors that.
It recorded decline of roughly 40% year to year in both revenue
and adjusted earnings in December.
Twitter's businesses were stagnating before, musk's take
over it, hasn't booked an annual profit since 2019 and it posted
a loss for eight years of the past decade and to lift Revenue
musk is looking to relaunch a paid Subscription Service.
Twitter blew on numerous levels, which will allow users to edit
tweets Test new features before. They are made available to other
normal users and other options available.
Oil for the future. Now, Twitter blue has as many as
450 thousand subscribers, according to estimates from
Travis Browne a berlin-based software developer who tracks
social media Platforms in must cause cutting efforts, have
involved slashing headcount, which he said in December was
down to roughly 2,000 from nearly 8,000 people before the
acquisition Twitter laid off and another round of workers last
month. And they may continue on this
trend for the foreseeable future.
Now, there is some path to survival for Twitter as well.
It's on a path to break. Even in about nine months said,
Daniel lives a managing director at Financial Services firm,
wedbush Securities Inc, the social media company likely will
have to demonstrate. It has a stabilized business
model before it receives another infusion of capital and a
renegotiation of the terms of the interest payments might
offer Twitter and musk some respite for Us the bank
Syndicate that put together the loan backing musk's acquisition
has been struggling to sell that debt to third-party investors
and his team. Also held talks with investors
about selling them to three billion dollars in new Twitter
shares to repay some of that debt.
Now Ilan, if not the world's richest person, he's the second
richest person in the world. Could continue making interest
payments on Twitter's debt by ejecting more of his personal
wealth or finding other Equity investors.
And another option would be to sell more Tesla Inc stocks which
would likely future shrink, the electric vehicles, market,
share, and musk, who is also the CEO of Tesla sold shares in the
car maker, in November yielding almost four billion dollars.
Instead, the sale was partly due to Twitter, he said a December,
he wouldn't sell more Tesla shares for at least, 18 months
and that seemed to stabilize the Tesla shares at that.
Point. Now must could strike a deal
with lenders to pay a payment extension restructure, the debt,
obtain a covenant, waiver or make other changes to loan terms
in the chief executive could also eventually buy some of the
debt in potentially take full ownership Twitter, such as
purchase could take the debt off of the company's balance sheet
and put it all in the hands of Elon Musk.
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So, please hit the Subscribe button, you'll get the latest
news on your podcast app. Now, musk's team held talks with
investors about selling up to three billion dollars and do
Twitter shares to repay some of the debt and Equity raise.
If successful could be used to pay down in unsecured portion of
the death that carries the highest interest rate within the
13 billion dollar, Twitter loan package, however, the company's
small group of debt holders might team up and use their
bargaining power. To restructure the debt only, if
musk injects more Equity, or by some of that debt, Now, if musk
is unable to secure additional debt or Equity, bankruptcy could
be in the carts potentially through a technical default or
failing to pay interest costs through analysts and economics,
they said that that move doesn't appear to be imminent and musk
is talking on Twitter, a lot and in February, he said the
previous three months were extremely tough as he rushed to
quote save Twitter from bankruptcy company.
He's that go through bankruptcy often change top management and
filing for bankruptcy protection would likely Wipeout musk's
personal investment. But it would also allow him to
negotiate with creditors in a single form and raise new debt
from senior lenders. According to Josh, White and
assistant professor of Finance at Vanderbilt University and a
former Securities and Exchange Commission Economist.
Now, bankruptcy protection would allow interest to stop accruing
on any unsecured claim. Names such as accounts, payable
or loans not secured by elon's Tesla stock in contrast with a
private deal with lenders. And Twitter is not the only
social media platform struggling right now.
There's a Slowdown in the online Market altogether.
Maybe digital ad platforms face, similar issues amid concerns
over a potential economic downturn.
However, Twitter situation is unique in that the company has a
huge debt burden has been unprofitable for years.
And for Twitter to thrive needs to attract new users, create
compelling content and monetize its platform more efficiently.
This is a difficult task given the intense competition in the
social media space in the current economic environment.
However, with musk's resources and vision, it's not really that
impossible. If you think about it, Twitter
has a very loyal user base. The values, the platform's
ability to connect people and share information is also been
an important platform for political.
Disclosure disclosure and activism if must can leverage
these strengths while developing new revenue streams, Twitter
could become a thriving business again, and one potential area
for growth is e-commerce. Twitter could become a platform
for buying and selling products similar to Instagram and
Facebook. In this would require
significant investment in infrastructure and Partnerships
with retailers, but it could be a lucrative Market another area
for growth is in premium. Content.
Twitter could partner with media companies to create exclusive
content. That users would be willing to
pay for this. Could include Live Events such
as concerts and sporting events as well as original programming.
And Twitter could also leverages data to provide targeted,
advertising and insights to businesses, this would require a
significant investment at data analytics and machine learning,
but it could be a lucrative market for the future.
Now, Elon Musk faces, significant challenges turning
Twitter into a profitable Able business, whoever with his
resources, the people around him, and his vision.
It doesn't look like it's going to be a possible.
He needs to focus on cutting costs, developing new revenue
streams and attracting new users.
He also needs to be strategic and managing Twitter's debt, and
negotiating with creditors. And if you could do all those
things, Twitter could become a thriving business in a valuable
asset in musk's portfolio of companies.
Thank you for listening to the Elon Musk podcast.
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