Elon Musk takes over Twitter

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I don't know if he is oblivious. But with the amount of debt he had to take on to buy the company at that ridiculous valuation, the old model is not going to work. The company is going to drown in the debt that he saddled it with. The platform was static and not growing users for a long time. The business itself had little cash flow, and even though it is true that advertising accounted for the revenue that it actually had, it ran into a wall on trying to generate that ad revenue. ... in good part because there is 1) social media with better user engagement for those willing to pay higher ad rates, 2) the content on Twitter scares a lot of potential advertisers off.

Whoever wrote that doesn't understand it from the chair Musk is sitting in. Musk has a billion dollars in an interest payment coming due very soon, and forget profits, the company has never even generated close to that amount of cash in a year. It's undoubtedly generating even less cash now with his daily shit show and with the advertisers who have likely fled because of that. ... but even without that, if he tries to do more of the same, he's screwed. He'll be reaching into his own pocket for eternity if he wants to keep the company afloat.

The problem is that he's now flailing, because he has no clue how to magically transform the business into something completely different that generates the kind of cash he needs to satisfy the debt he had to take on. An ad-based content platform ain't the answer. Not with what he is into the company for.

 

That has been the fun of it all for me. He trapped himself. It's his money on the line and he can't bullshit and bubblegum his way out of it the way he has over and over again as a businessman. There are no government subsidies, the company isn't public anymore so he can't somehow use the loose financial conditions to create a frenzy that pawns off some of the valuation (and it's the valuation HE put on the company) on others, and because we are no longer at permanent zero interest rates and lending has tightened up just a little, he can't just roll over an escalating pile of debt endlessly the way people in over their heads like this have been for more than a decade.

The environment is a little more hostile to the survival of the unfittest. He can bullshit all he wants about things he is going to do that are revolutionary. ... but he's just flailing. It's clear he has nothing.