When Elon Musk first playfully tweeted that he would buy Twitter for $44B, he probably never really thought he’d have to deal with the reality of it.
But after Twitter called his bluff and forced him to follow through on the sale, Musk now finds himself in charge of a company that has failed to turn a profit for 3 of the pastfive5 years.
Adding to his financial woes, a massive drop in ad revenue since he took over the company has turned Twitter into a business nightmare of epic proportions.
Musk let go of 50% of Twitter’s staff last week to try to curtail the financial hemorrhaging, but cutting back on costs won’t bring advertisers back.
Now Musk has a simple solution, vote Republican to save Twitter.
Musk has blamed activists for chasing away advertisers, but industry experts believe that the fact that Musk is gleefully spreading conspiracy theories is shaking advertiser confidence more than anything else.
When Musk took over, he piled $13B in debt on the company, and interest payments will add an additional $1.2B in the next 12 months following a series of interest rate hikes by the Federal Reserve too trim inflation).
The interest payments exceed Twitter’s most recently disclosed cash flow, which only amounts to $1.1B as of the end of June, according to financial disclosures made before Musk took control.
Experts say Musk will need to make sure that Twitter is profitable quickly enough to meet its debt obligations, or they will need to pour cash into the company.
Musk is also adding an $8-a-month subscription service for people to receive verified checks, at this point, looking for any way to plug the company’s cash outflow.
But since Musk himself may be what’s chasing advertisers away from Twitter, it will be an uphill battle to bring them back and turn the profit the company desperately needs.
Twitter is more popular than its ever been. Elon is a genius and you will see he has a method to his madness.
How is he a genius? If over paid for broken code. It will take him 3 decades to break even.