1 00:00:03,600 --> 00:00:06,800 Hi and welcome to another episode of the Elon Musk podcast 2 00:00:06,800 --> 00:00:09,500 where we delve into the latest developments in the world of 3 00:00:09,500 --> 00:00:13,300 Tech, Finance and innovation. In this episode, we take a deep 4 00:00:13,300 --> 00:00:16,600 dive into the financial challenges facing Elon Musk and 5 00:00:16,600 --> 00:00:19,600 is social media. Acquisition of Twitter now is 6 00:00:19,600 --> 00:00:22,300 one of the world's most influential Business Leaders. 7 00:00:22,700 --> 00:00:26,100 Elon Musk is facing immense, pressure to turn Twitter into a 8 00:00:26,100 --> 00:00:29,800 profitable business and despite musk's ambitious plans for the 9 00:00:30,000 --> 00:00:32,400 Platform. Twitter continues to struggle 10 00:00:32,400 --> 00:00:36,600 with a high cost, debt burden and a decline in Revenue. 11 00:00:36,900 --> 00:00:40,300 So, join us, as we explore the future of Twitter, under the 12 00:00:40,300 --> 00:00:45,200 leadership of Elon Musk. Now, Twitter's kind of facing an 13 00:00:45,200 --> 00:00:49,000 existential crisis right now, Elon Musk, the company's owner, 14 00:00:49,000 --> 00:00:52,400 and CEO Under Pressure to turn the social media platform me to 15 00:00:52,400 --> 00:00:56,300 a cash flow, positive business, and nearly five months after 16 00:00:56,300 --> 00:00:58,200 musk's forty four billion dollar. 17 00:00:58,200 --> 00:01:01,900 Take over Twitter is Still burning through cash, in the 18 00:01:01,900 --> 00:01:06,400 company's financials remain strained, due to an Advertiser, 19 00:01:06,400 --> 00:01:11,300 pull back and high-cost debt. Now, to stem, the cash burn musk 20 00:01:11,300 --> 00:01:14,800 is taken aggressive steps to cut costs, including reducing 21 00:01:14,800 --> 00:01:19,000 Twitter's task force by about 75%. 22 00:01:19,200 --> 00:01:22,300 Now, speaking at a Morgan Stanley conference musk said, 23 00:01:22,300 --> 00:01:25,800 Twitter has a shot at being cash flow positive in the second 24 00:01:25,800 --> 00:01:29,300 quarter and analysts and academics agree that this would 25 00:01:29,300 --> 00:01:32,700 give him the The time he needs to develop and build out, new 26 00:01:32,700 --> 00:01:36,500 revenue streams. Now, Twitter has to keep up with 27 00:01:36,500 --> 00:01:38,900 quarterly. Interest payments are the 13 28 00:01:38,900 --> 00:01:42,300 billion, dollars of debt that helped pay for musk's purchase 29 00:01:42,300 --> 00:01:45,100 of the company. It had less than 600 million 30 00:01:45,100 --> 00:01:48,700 dollars in net debt before the Takeover and the company has to 31 00:01:48,700 --> 00:01:53,300 pay 1.5 billion dollars a year in interest costs while its 32 00:01:53,300 --> 00:01:57,400 annual operating costs are now close to 1.5 billion dollars. 33 00:01:58,400 --> 00:02:01,400 Now Twitter has also been hit with lawsuits from landlords 34 00:02:01,400 --> 00:02:04,600 consultants and vendors who claimed that Twitter hasn't paid 35 00:02:04,600 --> 00:02:07,400 its bills and Twitter told investors that. 36 00:02:07,400 --> 00:02:12,500 It recorded decline of roughly 40% year to year in both revenue 37 00:02:12,800 --> 00:02:15,000 and adjusted earnings in December. 38 00:02:16,000 --> 00:02:20,100 Twitter's businesses were stagnating before, musk's take 39 00:02:20,100 --> 00:02:24,900 over it, hasn't booked an annual profit since 2019 and it posted 40 00:02:24,900 --> 00:02:29,700 a loss for eight years of the past decade and to lift Revenue 41 00:02:30,000 --> 00:02:33,200 musk is looking to relaunch a paid Subscription Service. 42 00:02:33,600 --> 00:02:37,600 Twitter blew on numerous levels, which will allow users to edit 43 00:02:37,600 --> 00:02:41,300 tweets Test new features before. They are made available to other 44 00:02:41,600 --> 00:02:45,200 normal users and other options available. 45 00:02:45,300 --> 00:02:48,800 Oil for the future. Now, Twitter blue has as many as 46 00:02:48,800 --> 00:02:52,600 450 thousand subscribers, according to estimates from 47 00:02:52,600 --> 00:02:56,400 Travis Browne a berlin-based software developer who tracks 48 00:02:56,400 --> 00:03:00,300 social media Platforms in must cause cutting efforts, have 49 00:03:00,300 --> 00:03:03,500 involved slashing headcount, which he said in December was 50 00:03:03,500 --> 00:03:08,200 down to roughly 2,000 from nearly 8,000 people before the 51 00:03:08,200 --> 00:03:12,200 acquisition Twitter laid off and another round of workers last 52 00:03:12,200 --> 00:03:14,800 month. And they may continue on this 53 00:03:14,800 --> 00:03:17,100 trend for the foreseeable future. 54 00:03:17,600 --> 00:03:20,500 Now, there is some path to survival for Twitter as well. 55 00:03:21,000 --> 00:03:24,000 It's on a path to break. Even in about nine months said, 56 00:03:24,000 --> 00:03:27,100 Daniel lives a managing director at Financial Services firm, 57 00:03:27,400 --> 00:03:30,700 wedbush Securities Inc, the social media company likely will 58 00:03:30,700 --> 00:03:33,300 have to demonstrate. It has a stabilized business 59 00:03:33,300 --> 00:03:37,200 model before it receives another infusion of capital and a 60 00:03:37,200 --> 00:03:41,000 renegotiation of the terms of the interest payments might 61 00:03:41,000 --> 00:03:45,000 offer Twitter and musk some respite for Us the bank 62 00:03:45,000 --> 00:03:48,100 Syndicate that put together the loan backing musk's acquisition 63 00:03:48,100 --> 00:03:51,600 has been struggling to sell that debt to third-party investors 64 00:03:51,900 --> 00:03:54,300 and his team. Also held talks with investors 65 00:03:54,300 --> 00:03:57,400 about selling them to three billion dollars in new Twitter 66 00:03:57,400 --> 00:03:59,300 shares to repay some of that debt. 67 00:04:00,200 --> 00:04:04,700 Now Ilan, if not the world's richest person, he's the second 68 00:04:04,700 --> 00:04:07,600 richest person in the world. Could continue making interest 69 00:04:07,600 --> 00:04:10,800 payments on Twitter's debt by ejecting more of his personal 70 00:04:10,800 --> 00:04:13,200 wealth or finding other Equity investors. 71 00:04:13,800 --> 00:04:18,600 And another option would be to sell more Tesla Inc stocks which 72 00:04:18,600 --> 00:04:23,400 would likely future shrink, the electric vehicles, market, 73 00:04:23,400 --> 00:04:28,400 share, and musk, who is also the CEO of Tesla sold shares in the 74 00:04:28,407 --> 00:04:32,600 car maker, in November yielding almost four billion dollars. 75 00:04:32,600 --> 00:04:35,900 Instead, the sale was partly due to Twitter, he said a December, 76 00:04:35,900 --> 00:04:39,500 he wouldn't sell more Tesla shares for at least, 18 months 77 00:04:39,500 --> 00:04:43,300 and that seemed to stabilize the Tesla shares at that. 78 00:04:43,400 --> 00:04:46,400 Point. Now must could strike a deal 79 00:04:46,400 --> 00:04:50,800 with lenders to pay a payment extension restructure, the debt, 80 00:04:51,400 --> 00:04:55,300 obtain a covenant, waiver or make other changes to loan terms 81 00:04:55,600 --> 00:04:59,500 in the chief executive could also eventually buy some of the 82 00:04:59,500 --> 00:05:02,800 debt in potentially take full ownership Twitter, such as 83 00:05:02,800 --> 00:05:07,400 purchase could take the debt off of the company's balance sheet 84 00:05:07,400 --> 00:05:09,800 and put it all in the hands of Elon Musk. 85 00:05:10,600 --> 00:05:12,600 Now, I want to ask you for a favor real quick. 86 00:05:13,100 --> 00:05:15,700 Could you please hit the subscribe, a button on whatever 87 00:05:15,700 --> 00:05:18,600 podcast platform that you're on right now, it would really help 88 00:05:18,600 --> 00:05:22,500 out the show and could get you back here so you can listen to 89 00:05:22,500 --> 00:05:25,500 more Elon musk's news. If you like Tesla, if you like 90 00:05:25,500 --> 00:05:28,400 SpaceX, if you like the boring company or Twitter does hit the 91 00:05:28,400 --> 00:05:31,500 Subscribe button, we do these shows almost every day. 92 00:05:31,500 --> 00:05:33,600 I think, I don't think we missed a day for the last two hundred 93 00:05:33,600 --> 00:05:35,400 and forty four days or something like that. 94 00:05:35,700 --> 00:05:37,800 So, please hit the Subscribe button, you'll get the latest 95 00:05:37,800 --> 00:05:43,500 news on your podcast app. Now, musk's team held talks with 96 00:05:43,500 --> 00:05:46,100 investors about selling up to three billion dollars and do 97 00:05:46,100 --> 00:05:49,300 Twitter shares to repay some of the debt and Equity raise. 98 00:05:49,300 --> 00:05:53,700 If successful could be used to pay down in unsecured portion of 99 00:05:53,700 --> 00:05:56,700 the death that carries the highest interest rate within the 100 00:05:56,700 --> 00:06:01,000 13 billion dollar, Twitter loan package, however, the company's 101 00:06:01,000 --> 00:06:04,000 small group of debt holders might team up and use their 102 00:06:04,000 --> 00:06:06,900 bargaining power. To restructure the debt only, if 103 00:06:06,900 --> 00:06:12,300 musk injects more Equity, or by some of that debt, Now, if musk 104 00:06:12,300 --> 00:06:16,600 is unable to secure additional debt or Equity, bankruptcy could 105 00:06:16,600 --> 00:06:20,800 be in the carts potentially through a technical default or 106 00:06:21,000 --> 00:06:25,000 failing to pay interest costs through analysts and economics, 107 00:06:25,400 --> 00:06:29,500 they said that that move doesn't appear to be imminent and musk 108 00:06:29,500 --> 00:06:34,100 is talking on Twitter, a lot and in February, he said the 109 00:06:34,100 --> 00:06:37,100 previous three months were extremely tough as he rushed to 110 00:06:37,300 --> 00:06:40,400 quote save Twitter from bankruptcy company. 111 00:06:40,500 --> 00:06:44,700 He's that go through bankruptcy often change top management and 112 00:06:44,700 --> 00:06:48,700 filing for bankruptcy protection would likely Wipeout musk's 113 00:06:48,700 --> 00:06:51,100 personal investment. But it would also allow him to 114 00:06:51,100 --> 00:06:54,900 negotiate with creditors in a single form and raise new debt 115 00:06:54,900 --> 00:06:58,000 from senior lenders. According to Josh, White and 116 00:06:58,000 --> 00:07:01,900 assistant professor of Finance at Vanderbilt University and a 117 00:07:01,900 --> 00:07:04,500 former Securities and Exchange Commission Economist. 118 00:07:05,000 --> 00:07:08,500 Now, bankruptcy protection would allow interest to stop accruing 119 00:07:09,000 --> 00:07:12,100 on any unsecured claim. Names such as accounts, payable 120 00:07:12,300 --> 00:07:17,200 or loans not secured by elon's Tesla stock in contrast with a 121 00:07:17,200 --> 00:07:20,500 private deal with lenders. And Twitter is not the only 122 00:07:20,500 --> 00:07:22,700 social media platform struggling right now. 123 00:07:23,000 --> 00:07:25,500 There's a Slowdown in the online Market altogether. 124 00:07:25,800 --> 00:07:29,200 Maybe digital ad platforms face, similar issues amid concerns 125 00:07:29,200 --> 00:07:32,000 over a potential economic downturn. 126 00:07:32,400 --> 00:07:35,600 However, Twitter situation is unique in that the company has a 127 00:07:35,608 --> 00:07:39,000 huge debt burden has been unprofitable for years. 128 00:07:40,100 --> 00:07:43,600 And for Twitter to thrive needs to attract new users, create 129 00:07:43,600 --> 00:07:47,400 compelling content and monetize its platform more efficiently. 130 00:07:47,700 --> 00:07:51,100 This is a difficult task given the intense competition in the 131 00:07:51,100 --> 00:07:54,300 social media space in the current economic environment. 132 00:07:54,400 --> 00:07:58,700 However, with musk's resources and vision, it's not really that 133 00:07:58,700 --> 00:08:01,000 impossible. If you think about it, Twitter 134 00:08:01,000 --> 00:08:03,700 has a very loyal user base. The values, the platform's 135 00:08:03,700 --> 00:08:07,800 ability to connect people and share information is also been 136 00:08:07,800 --> 00:08:09,500 an important platform for political. 137 00:08:09,700 --> 00:08:13,700 Disclosure disclosure and activism if must can leverage 138 00:08:13,700 --> 00:08:17,300 these strengths while developing new revenue streams, Twitter 139 00:08:17,300 --> 00:08:20,900 could become a thriving business again, and one potential area 140 00:08:20,900 --> 00:08:24,900 for growth is e-commerce. Twitter could become a platform 141 00:08:25,100 --> 00:08:28,300 for buying and selling products similar to Instagram and 142 00:08:28,300 --> 00:08:30,100 Facebook. In this would require 143 00:08:30,100 --> 00:08:33,200 significant investment in infrastructure and Partnerships 144 00:08:33,200 --> 00:08:38,000 with retailers, but it could be a lucrative Market another area 145 00:08:38,000 --> 00:08:40,200 for growth is in premium. Content. 146 00:08:40,400 --> 00:08:43,299 Twitter could partner with media companies to create exclusive 147 00:08:43,299 --> 00:08:45,300 content. That users would be willing to 148 00:08:45,300 --> 00:08:47,800 pay for this. Could include Live Events such 149 00:08:47,800 --> 00:08:51,500 as concerts and sporting events as well as original programming. 150 00:08:52,000 --> 00:08:55,000 And Twitter could also leverages data to provide targeted, 151 00:08:55,000 --> 00:08:58,200 advertising and insights to businesses, this would require a 152 00:08:58,208 --> 00:09:01,600 significant investment at data analytics and machine learning, 153 00:09:01,800 --> 00:09:04,700 but it could be a lucrative market for the future. 154 00:09:05,100 --> 00:09:08,600 Now, Elon Musk faces, significant challenges turning 155 00:09:08,600 --> 00:09:11,800 Twitter into a profitable Able business, whoever with his 156 00:09:11,800 --> 00:09:14,900 resources, the people around him, and his vision. 157 00:09:15,400 --> 00:09:17,700 It doesn't look like it's going to be a possible. 158 00:09:18,100 --> 00:09:21,400 He needs to focus on cutting costs, developing new revenue 159 00:09:21,400 --> 00:09:23,900 streams and attracting new users. 160 00:09:24,300 --> 00:09:27,800 He also needs to be strategic and managing Twitter's debt, and 161 00:09:27,800 --> 00:09:31,000 negotiating with creditors. And if you could do all those 162 00:09:31,000 --> 00:09:34,600 things, Twitter could become a thriving business in a valuable 163 00:09:34,600 --> 00:09:37,400 asset in musk's portfolio of companies. 164 00:09:38,900 --> 00:09:41,400 Thank you for listening to the Elon Musk podcast. 165 00:09:41,700 --> 00:09:44,100 I appreciate you here. If you could check out our 166 00:09:44,100 --> 00:09:47,800 sponsor Starships shirts.com, they're our partner here and you 167 00:09:47,800 --> 00:09:53,000 can get Elon musk's SpaceX NASA, inspired gear for really great 168 00:09:53,000 --> 00:09:54,900 prices and the really great quality. 169 00:09:55,200 --> 00:10:01,200 I'm wearing a what is a raptor engine t-shirt right now and 170 00:10:01,200 --> 00:10:03,500 it's really cool. It's really nice. 171 00:10:03,600 --> 00:10:09,600 And the cut is very comfortable and the Stitching is very nice, 172 00:10:09,600 --> 00:10:13,300 very sturdy but also very soft in the the fits really cool. 173 00:10:13,300 --> 00:10:14,700 I like it. So check it out. 174 00:10:14,700 --> 00:10:19,100 Starship shirts.com, go check them out and I'll so that's 175 00:10:19,100 --> 00:10:21,200 about it for today. Thanks for listening and thanks 176 00:10:21,200 --> 00:10:32,600 for subscribing to the show. Zero Productions and hosted by 177 00:10:32,600 --> 00:10:33,600 me. Will Walden. 178 00:10:34,000 --> 00:10:36,600 We hope you've enjoyed today's episode and gain some valuable 179 00:10:36,600 --> 00:10:39,000 insights. If you haven't already, be sure 180 00:10:39,000 --> 00:10:42,300 to subscribe on your favorite podcast app so you never miss an 181 00:10:42,300 --> 00:10:45,000 episode. And for exclusive add free 182 00:10:45,000 --> 00:10:47,300 content. 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