this post was submitted on 31 Oct 2023
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I was expecting much less than that. o_O
That's because it isn't worth nearly that.
It was estimated at around $20 bil when he bought it. Since then he has more than cut revenue in half. The value today is at most $ 10 bil.
Except Musk has added a burden of $ 20 bil in debt, causing interest cost of $1.5 bil per year.
Twitter was not earning money when Musk bought it, but now it operates at huge deficits, and has huge negative internal value.
So the company has a net negative value. The only value may come from losses being tax deductible to a buyer. But that too is worth way less than the debt. Any value is completely speculative, based on a belief against evidence, that the company can still be turned around.
The value of twitter isn't its revenue but rather its userbase. Which is still extremely strong.
Doesn't change the fact that the value when Musk bought it was estimated around $20 bil.
With an added debt since that of a similar amount of around $20 billion. It still ends up zero, even with the 20 bil worth of it's customers.
With the reduced revenue, the value of those customers are also reduced.
So no matter how strong it was, it doesn't change the fact that it hasn't gotten stronger, and their value is no longer enough to balance the debt and deficits.
So you genuinely think twitter is worth 0$? If so, you are dumb. corporate debt means nothing when the main value you have is intangible, nonliquidatable assets. Twitter is still worth a lot of money, even with it's debt and revenue decline.
No it's not, people putting more money into it, are more likely to lose than to earn on it. The thing formerly known as twitter, is a dead man walking, it will only be able to continue for as long as people accept not getting their money, or putting money into it at a loss.
Of course the millions of users have value, but the company does not, because the debt is higher than the total value. Only way to continue, is a restructuring where a lot of people will lose a lot of money, but they may accept it as better than losing all.
Elon musk managed to push half his loss onto other people, by borrowing $20bil in Twitter. I suspect they will not be happy, and Elon Musk's word will be worth a lot less after this.