[churchill]

I wonder who's going to be buying, since they're selling at just a 5% discount. Since the purchase, Twitter has lost 85% to 90% of its revenues. So, I think the discount doesn't factor in just how much value X has lost. And, unless Musk buys back the debt, I don't see any takers lining up.

Judging by how much stock Elon had to sell, plus the loans/equity raised for the initial purchase, it feels like an all-round bad decision.

From another perspective, judging by how X played a huge role in the 2024 election & Elon's new role as First Friend, maybe his rapidly improving fortune factors into the calculus.

[breatheoften]

I'm sure it factors into the calculus of the sellers -- best chance they have that there might exist an irrational buyer onto whom they can unload the losses is likely now ...

[HDThoreaun]

These loans have nothing to do with twitters value though. The question is will musk pay the debt off, not whether twitter will become more valuable. Right after the deal was done investors wondered musk might just let the loans default and give twitter to his creditors, but now that it seems so important to him politically he is less likely to do that.

[FollowingTheDao]

-These loans have nothing to do with twitters value though.

Of course it does! Why do you think Elon was complaining about the article so much?

[bloopernova]

I am less sure that x means anything to musk. I could absolutely see him shut it down in a fit of anger.

Although that's based on a very distant view of his actions, maybe in private he's 100% on board.

[rurp]

I don't know, for the past few years Elon has seemed more passionete about trolling on Twitter than literally anything else in the world. One of the first changes after the purchase was to make it so that his tweets got special rules so they show up to everyone whether they like it or not. He currently posts on it a gazillion times per day.

Maybe in the future his attention will drift elsewhere, in which case yeah he'll let the company die without a second thought, but we don't seem to be anywhere near that point these days.

[aprilthird2021]

Well, will it still be valuable at bond maturity, the main question

[notjoemama]

> Twitter has lost 85% to 90% of its revenues.

Do you mean from when Musk purchased it?

https://www.businessofapps.com/data/twitter-statistics/

Looking at the revenue growth, does anyone know why it increased in value to the degree it did leading up to its sale? I recall there was some discussion around the amount of bots (not the existence, the degree).

Pre-sale:

https://www.pewresearch.org/internet/2018/04/09/bots-in-the-...

https://www.pewresearch.org/short-reads/2018/04/19/qa-how-pe...

During the process:

https://www.cpomagazine.com/cyber-security/we-checked-elon-m...

I wonder to what degree bots are still influence the platform. For that matter, it would be nice to know how bad the problem is on Reddit.

[churchill]

I don't understand to what extent bots impacted Twitter's revenue or if at all that happened, after all, that only came up as one of a few tactics Elon tried using to get out of buying Twitter.

Thing is, as a public company, Twitter's revenues were public, amounting to $5.229B/yr (i.e., up to the sale). And, the New York Times reported they were doing $114M/quarter in early 2024. Annualized, that's $456M per year. So, an 87% revenue decline if we compare X's self-reported revenues against Twitter's last public disclosures before being acquired.

[churchill]

Faulty math here - revenues are down 91.3% actually.

[jncfhnb]

It’s not particularly clear that X played a significant role

[jfengel]

Probably not. But it did raise Musk's prominence in the political realm, and might have been a crucial step towards the significant role that he played himself.

That wasn't the plan, to be sure. But whatever the plan was originally, it is now secondary.

[api]

I doubt it changed anyone’s mind. It’s just a rallying point for one side at this point.

[swasheck]

i’ve heard tiktok and not x is the platform of blame

[mminer237]

Probably not in Trump winning, but I can't imagine Musk having so much sway over Trump otherwise.

[jncfhnb]

I think he would have more sway over trump if he had billions more dollars not lost on X tbh

[nine_k]

"$34B is a steep price to kill Twitter, but maybe it's worth it", a somebody wrote back in the day.

Apparently it sort of was worth it for Musk, but it cost him, and is going to cost further down the line.

[bdangubic]

he bought an office in the white house which he already turned into much more than what he invested in X with 4 more years to come…

[Hikikomori]

They put him in a building across the street and he has to talk to chief of staff now.

[bdangubic]

if I had $44bn to spare I’d pay for that kind of access to USA government… running “DOGE” alone I’d pay twice that

[rsynnott]

I mean, realistically, hard to imagine him lasting 4 years. See the previous Trump term… turnover was… high.

[bdangubic]

if you surround yourself with intelligent people (which for the most part he did in both 2016-2020 and now) they will get sick of him soon (we have 78 years of examples of this…) :)

[Theodores]

He bought himself into the White House as a tech-bro Rasputin, probably the most paid for that level of influence, so we can expect him to get his money's worth.

[thinkcontext]

He has made many times his money back in the value rise in Tesla and SpaceX.

[stefs]

but the value of tesla and spacex didn't rise because of him having control of twitter, it would have risen regardless.

[shawabawa3]

It rose because of his government access

And you could argue his government access is due to controlling twitter

[xracy]

I mean, this might've made sense if he was killing it fast... but He's killing it with enough time for it to come back as bluesky.

[tomjen3]

Does the value of a company matter for their bonds?

As I understand it, Twitter is breaking even given all expenses, which means that they should not have problems paying back their debt. In which case, the investment seems solid. If we were talking stocks, I would understand it.

[jacobjjacob]

If they aren’t growing, and barely breaking even, the chances of going into the red are not low. Idk if the bonds have a rating but I don’t think X would have a AAA rating right now?

If it’s really worth 95%, it’s only held up by the political situation and investors’ general Elon bubble.

[mminer237]

Bonds do have a rating, but Microsoft is the only AAA corporate bond I know of off the top of my head. Even Amazon is AA, while I would guess Twitter more like AMC at CCC- if it were rated.

[ben_w]

> As I understand it, Twitter is breaking even given all expenses

What I've heard is the opposite, that the cost of servicing interest on the loans they now have exceeds 100% of their total revenue.

(Not profit, revenue: even if they cut absolutely every other cost to zero they'd still be losing money).

[wbl]

Debt is short a put. The shareholders can walk away from a default and you are stuck with whatever the company is worth. So the more enterprise value vs the debt, the safer.

[MuffinFlavored]

> Since the purchase, Twitter has lost 85% to 90% of its revenues.

Source? Is this true?

[smallerize]

84% as of August, according to documents obtained by the NYT. https://finance.yahoo.com/news/twitters-revenue-collapses-84...

[churchill]

Yeah, thanks for this. The WSJ piece was reporting -84%, but if you measure against Twitter's last full year/publicly reported revenues before going private, it's closer to -90%.

[toomuchtodo]

Not great when you have to pay $1B in interest per year.

[bloopernova]

Not sure about those figures, but WSJ ran a story recently about a musk email saying x was barely breaking even:

https://archive.ph/cCOlA

https://www.wsj.com/finance/banking/wall-street-banks-prepar...

[rsynnott]

They seem to be only selling senior debt, which is _somewhat_ less risky (when a company is wound up, senior debt gets paid first) and hanging onto the junior debt.

[raverbashing]

Pretty much https://x.com/peterjukes/status/1883109889452437607?t=EmMG7K...

[exe34]

> it feels like an all-round bad decision.

Eh, he bought the White House for $40bn. I say that's a very good purchase, given how he can now leverage it to get better deals for his business. E.g. Greenland for resources to make batteries.

[aprilthird2021]

Many other foreign lobbies and interest groups buy influence in the White House (in all administrations) for substantially less

[bloopernova]

I had read* that his interest in Ukraine and putin was to gain a share of Ukrainian mineral wealth. If that rumour was true, then yeah I could see him advocating for an invasion of Greenland. Although, didn't the Greenland SNAFU start with trump?

* And don't have a link to whatever it was, so take with a cyber truck full of salt!

[exe34]

They're not going to invade Greenland, they can already control it. they'll start an economic war with Europe over it first.

[kmeisthax]

If my fuzzy memories are anywhere close to correct, Trump wanted to buy it in 2017, Denmark said no, and he went on to slapping stupid[0] tariffs on Canadian and European exports before putting tariffs on China.

Trump's 2025 playbook seems entirely identical. The thing is, America has wanted Greenland for at least a century[1]. I would not be surprised if there's some long-timer in the Executive Branch that just happens to have a chip on their shoulder about how much America should have a Greenland. There's a lot of reasons why America would be safer and wealthier with the island, but Denmark isn't going to sell it. Hell, Greenland itself doesn't even want to be Danish, much less American[2].

[0] They're stupid because any hope of America remaining economically prosperous without China to sell us cheap shit (or Saudi Arabia to sell us cheap oil) relies on having a large free-trade area. Y'know, the sort of thing TPP was supposed to give us.

[1] https://en.wikipedia.org/wiki/Proposals_for_the_United_State...

[2] https://en.wikipedia.org/wiki/Greenlandic_independence

[bloopernova]

Thank you for the reminder and links, much appreciated!

[aucisson_masque]

> From another perspective, judging by how X played a huge role in the 2024 election & Elon's new role as First Friend, maybe his rapidly improving fortune factors into the calculus.

That's it, it's even said in the article. Everyone know that Elon musk in the us government and him being buddy buddy with Trump is like inviting a wolf into a lamb's den.