this post was submitted on 20 Aug 2023
694 points (91.9% liked)
Technology
59135 readers
2588 users here now
This is a most excellent place for technology news and articles.
Our Rules
- Follow the lemmy.world rules.
- Only tech related content.
- Be excellent to each another!
- Mod approved content bots can post up to 10 articles per day.
- Threads asking for personal tech support may be deleted.
- Politics threads may be removed.
- No memes allowed as posts, OK to post as comments.
- Only approved bots from the list below, to ask if your bot can be added please contact us.
- Check for duplicates before posting, duplicates may be removed
Approved Bots
founded 1 year ago
MODERATORS
you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
Yes. Twitter was profitable in 2019. https://www.sec.gov/Archives/edgar/data/1418091/000141809120000037/twtr-20191231.htm
Ctrl+F for "Net Income", which will take you to the $1,465,659 (thousands) figure somewhere in its charts. Net Income is the bottom line: after all revenues, costs, etc. etc. of the year were added up.
Musk took it over with a so called "Leveraged Buyout", meaning Twitter borrowed $13 Billion to allow Elon Musk to buy it for $44 Billion (meaning Elon Musk only paid $33 Billion, the random +2 Billion to wipeout all the old debt).
Note that $13 Billion in loans costs somewhere between 10% to 14% right now, depending on how much of the loan was fixed and how much of it was adjustable. At 10%, this means that Twitter took on $1.3 Billion/year in interest payments as Elon Musk bought the company. There's pretty much no hope for Twitter to ever be profitable again, they'd have to execute as perfectly as 2019 despite losing 80% of their staff (Elon Musk also fired everyone when he took over the company).
The company was "barely profitable" in 2019, and "just barely losing money" in 2020, 2021. But add on a $1.3+ Billion/year loadstone, and its just... not... going to ever be profitable again.
The funniest part, though, is that the $13 billion in debt to Twitter is held by lenders who would be first in line to get any payout from a Twitter bankruptcy. If the enterprise value as a whole drops below $13 billion, then Musk would get nothing out of the bankruptcy, and would lose his entire $30b+ investment with nothing to show for it. Unless, of course, Musk decides to put good money after bad, and pony up a new investment of even more money, that the lenders would agree to take.