[nuz]

They've cut out things like viewing who liked a tweet etc (for cost savings I suspect) so the site is probably dirt cheap. Can't imagine ads don't pay for the cost of running servers at this point, and a headcount reduction might bring it to profitability.

[kryptiskt]

The ads may pay for the servers and reduced headcount[1], but there is no way that they pay for servicing the $10B of high-interest debt that the company was saddled with.

[1] Though with the NYT reporting that the American ad revenues was down 80% to $114M/quarter since the acquisition it might not be so obvious.

[runako]

> American ad revenues was down 80% to $114M/quarter since the acquisition

Debt service was estimated at ~$100m/mo, with the likelihood that rates on some of the debt could increase substantially since the financing was initially booked in mid 2022.

If these numbers are directionally accurate (and they do not report, so we don't know for sure), this thing is probably closer to losing a billion $ annually than to breakeven.

[mistrial9]

> Debt service was estimated at ~$100m/mo

source?

[runako]

Many sources for this, including:

https://www.thestreet.com/technology/elon-musk-has-a-huge-tw... and

https://www.nytimes.com/2022/10/30/technology/elon-musk-twit...

https://www.bloomberg.com/news/articles/2023-05-03/twitter-s...

If you don't like my choice of sources, any popular search engine will help you surface additional sources.

[dragontamer]

$13 Billion leveraged buyout means that Twitter took on $13 Billion in loans for the privilege of being bought out by Elon.

Assuming a rough interest rate of 10% to 15%, leaves 100million to 150million / month on debt alone.

[throwaway2037]

    > Assuming a rough interest rate of 10% to 15%

Do you have a source on this? I couldn't find anything.

[dragontamer]

On Twitters specific loan terms? No.

But market rates are well known and well published. CCC class loans were 10% in April 2022 when these deals were likely. So 10% to 15% covers the possible range of loans if you know much about the market.

https://fred.stlouisfed.org/series/BAMLH0A3HYCEY

The higher end of 15% would be possible if the loans were finalized closer to May or June.

There is a big difference from Feb 2022 vs April 2022 though. But we know the rough timeline of Twitters acquisition as well as the rough timeline of when deals were signed. So I'm reasonably confident in an April 2022 deal.

[runako]

Lower tiers of non-investment-grade corporate bonds currently yielding ~14%:

https://fred.stlouisfed.org/series/BAMLH0A3HYCEY

Looks like when he took down the financing, rates would have been in the 12% range. Possible some/all of the debt has been rolled over since then, possibly at higher rates.

[jrpelkonen]

Yes, the debt weighs heavily around their neck. If it eventually ends up in bankruptcy, will Elon Musk lose control of his beloved x.com domain name for the second time?

[zinekeller]

I would imagine that it was set up so that it is rented from Musk (instead of owning* outright), but it's Musk so who knows.

* I know it's still not owned owned but there is still a legal difference between X Corp directly renting x.com (from Verisign) versus leasing x.com by a different owner (maybe Musk, maybe a holding corp) to X Corp.

[rahkiin]

He’ll probably sell x.com to himself just before that happens

[chuckadams]

He’ll probably name his next kid X. His history at PayPal shows how obsessed he is with that letter.

[deeth_starr_v]

He calls his first kid with Grimes X

[ninininino]

Already happened

https://twitter.com/Garossino/status/1817220477427093963

[queuebert]

Maybe they could declare bankruptcy and sell for pennies on the dollar to a mysterious new holding company: Ksum Nole, LLC.

[seanhunter]

That's not how a bankruptcy works. In a bankruptcy, the company is owned by the creditors and gets resolved by them. Usually a business will attempt to avoid bankruptcy by filing Chapter 11[1] or similar so they get to propose a plan for restructuring that will pay back the creditors over time, but their actions as debtor in posession are scrutinized by the US trustee to ensure they meet a fiduciary obligation to the debtors, and the debtors can file a court case to appeal both the chap 11 and can try to get the debtor kicked out and a trustee appointed if they aren't acting in their interests.

[1] https://www.uscourts.gov/services-forms/bankruptcy/bankruptc...

[sebastiennight]

Quick heads-up: I think you've written "debtor" instead of "creditor" a couple times in there.

[queuebert]

Yes, I know. It was a joke.

[arresin]

Nah uh. Mr Ksum would find a way.

[citizenkeen]

I will wager a box of donuts the like-hiding was due to some combination of politics and Musk’s embarrassment for being called out every time he liked some cringe porn-adjacent tweet.

[dragontamer]

The issue is the $13 Billion loans and estimated $1.3 Billion/year interest payments.

I'm sure Elon can wipe those out himself, but it's still a lot of money that isn't accounted for. Twitter cannot merely float at barely profitability. Twitter needs at least $1.3 Billion/year to counteract interest payments.

[throwaway2037]

Elon can either directly pay the loans himself, or lend money to Twitter/X.

[dragontamer]

He could, but hasn't done so yet.

Instead, Elon continues to make decisions like closing Twitters headquarters.

[wonderwonder]

I actually don't think the removal of like views has anything to do with revenue.

I think they actually did this so users are free to like whatever they want without having to worry about getting vilified for liking something that is not supported by the majority. For example liking something political or anti whatever.

[chii]

which i think is a good thing - but i wish there's a toggle to allow the user to choose.

Sometimes i find interesting twitter accounts or posts through likes, and that's now gone.