Musk warns twitter may have to declare bankruptcy

[solado]

Elon in my mind went from a no-name to someone who could have accidentally saved society. The collapse of Twitter can only be a good thing in my mind, the place is a wild west of mental illness.

[Arika]

3 hours ago, oali24 said:

So you're telling me that the company went from a manageable amount of debt

Manageable amount of debt? They have been haemorrhaging money basically since they existed. I'm surprised it took this long.

No idea where they have been getting money to pay their employees.

 

 

Also sure hope people are happy musk was basically forced to buy Twitter now.

[leadeater]

2 hours ago, oali24 said:

and at least kind of tries to deal with misinformation.

Ah....... gonna have to disagree with that. But don't worry they are all equally pathetic at dealing with it. Twitter has also been accused of intentionally not dealing with and/or promoting such things as they noted huge increases in user interaction and account uptake due to it. So basically it's in Twitters interest to have massive amounts of fighting and misinformation spread on their platform as without it their platform by the metrics isn't anywhere near as "valuable".

 

Saying they are trying to deal with it is likely just as true as some companies that use biodegradable plastic bags that turned out to be just regular plastic bags. A company can literally say anything, whether or not it's the truth 

[oali24]

9 minutes ago, Arika S said:

Manageable amount of debt? They have been haemorrhaging money basically since they existed. I'm surprised it took this long.

 

 

Also sure hope people are happy musk was basically forced to buy Twitter now.

yeah, but adding up all their losses totals out to a loss of $4237.04 million or around $4 billion, musk basically added 3 times that amount of debt onto twitter.

[oali24]

18 minutes ago, Arika S said:

Also sure hope people are happy musk was basically forced to buy Twitter now.

do you think he should have been allowed to back out of the deal and not pay the $1 billion penalty they had already agreed to when he signed the deal?

[Arika]

13 minutes ago, oali24 said:

do you think he should have been allowed to back out of the deal and not pay the $1 billion penalty they had already agreed to when he signed the deal?

Couldn't care less about the legal side, all I saw was people going nuts saying "make him buy it". Then when it was confirmed he would those same people were saying "nooooo, I'm leaving twitter"

 

15 minutes ago, oali24 said:

yeah, but adding up all their losses totals out to a loss of $4237.04 million or around $4 billion,

Yes? $4billion in debt for a company that consistently never turns a profit is a huge deal.

Anyone buying twitter would have done the same thing, bring in more debt until they can restructure and stabilise. No one is gong to risk cash on buying a company with that much debt and negative profits, that would be a worse business decision than Musks stupid decision to buy it at the price he did. 

[Neroon]

 

 

 

Honestly, people can pretend they saw this coming, but who could have known? Sure they were losing money, and sure they had way too much staff, and sure the site is hot garbage, and sure impulse buying is bad, and sure making erratic changes and banning loads of people after promising a more open platform, might be all red flags, but you are forgetting all the positive things twitter has to offer.

 

Btw can someone mention the positive things they offer, I totally forgot about them.

 

 

I have to say, I never really liked Musk, but if I knew he would destroy Twitter, I would have been nicer about him.

Does anyone know him, and recommend buying Tiktok?

[porina]

1 hour ago, HenrySalayne said:

There could be a number of reasons, but AFAIK this is a common practice. In this particular case it seems several banks lend Musk 13 billion USD to takeover Twitter which now Twitter owes to these banks.

I don't understand how that works. If Musk was given the loans, he's on the hook, not Twitter. Twitter is now private and in a quick look Musk wholly owns it through his holding companies. 

 

1 hour ago, Kisai said:

Anyway. Download your data from Twitter now, because the last thing you want is for the company to go bankrupt and then that data ending up in the hands of a data broker or foreign entity.

 

Remember NCIX?

https://www.cbc.ca/news/canada/british-columbia/ncix-breach-probe-1.4833976

 

Now imagine that happening to twitter.

Twitter is already in the hands of a foreign entity. Musk. Most data is public anyway otherwise why are you even on there? Maybe if you have a lot of DMs that might be a point of concern.

 

NCIX situation I don't recall was followed through by law enforcement and is different since none of that data should have been public.

 

Also the posted Tweet doesn't make sense to me. I'm not familiar with Ireland's employment laws but I'm guessing they're not that different from UK/Europe. If you're directly employed but your contract doesn't say you work in Dublin, you don't work in Dublin. Changing it to say you have to work there is a process that needs to be done. Visiting on an occasional basis would typically require the employer to pick up the expenses. If you're a contractor you have an additional layer of separation and again it comes back to whatever the contract was. Given some of the things Musk has done in the past, I can well imagine he doesn't understand employment law and if the order was really given and enforced, it just opens up lots of potential legal action.

[Salv8 (sam)]

the moran's only had it a week!
christ bloody Gary Kappenman would be doin a better job then elon!

[Heliian]

4 hours ago, oali24 said:

depend on twitter for their livelyhoods

Okay, find another app.  Get a job that doesn't require twitter? 

[Ydfhlx]

1 hour ago, oali24 said:

yeah, but adding up all their losses totals out to a loss of $4237.04 million or around $4 billion, musk basically added 3 times that amount of debt onto twitter.

I wonder how much is it when taking interest rates into account. They weren't high over that period of time, so probably not a lot was added from them, but maybe the fact they increased now plays a big role in debt becoming a problem.

[Donut417]

5 hours ago, jagdtigger said:

Meh, one cesspool down the toilet.....

Maybe Facebook will be joining them as well. 

[yolosnail]

Musk may be an idiot, but he ain't stupid.

 

You don't get to where he is being stupid.

 

That's all I'm saying on the matter!

[Beerzerker]

42 minutes ago, Donut417 said:

Maybe Facebook will be joining them as well. 

Sadly that won't happen - The Gov has too much invested in it for all the data it collects on us.
It may change it's name over time but the core of it will always be around, snooping, spying and reporting on us to the gov.

As for Twitter, bankrupcy may be what it was needing all along to flush out the toxins within and start off fresh again.
 

2 hours ago, Arika S said:

Couldn't care less about the legal side, all I saw was people going nuts saying "make him buy it". Then when it was confirmed he would those same people were saying "nooooo, I'm leaving twitter"

It's a little thing called "Make up your damned mind" how you want things to go. 

Damned if you do and damned if you don't......
No way he's gonna make everyone happy anyway so he's doing what any other business owner would do and that's "What they gotta do" and to hell with the rest.
Some are gonna bitch anyway, just how it is and no need to even worry about those that do.
 

[Quackers101]

such a mess and agree the platform can be "good".

As we already see that is how creators interact with big brands and sometimes the ONLY way.

Do wonder if it's possible to create a network where social media can be a lot better and able to get gov info to social information.

Like if it's about current events like fires, police, gov, war, etc.

[Donut417]

42 minutes ago, Beerzerker said:

Sadly that won't happen - The Gov has too much invested in it for all the data it collects on us.
It may change it's name over time but the core of it will always be around, snooping, spying and reporting on us to the gov.

As for Twitter, bankrupcy may be what it was needing all along to flush out the toxins within and start off fresh again.

The issue is if Zuckerberg drives Facebook in to the ground, I dont think the government could justify bailing it out. This is not 2008, considering the shit I have seen happen in America since 2020, Im pretty sure a bailout might not be in the cards. People were not happy when we bailed out Wall Street. The fact is in the last few years we had cities literally burning. We had rioting in the streets and we had the capitol building ransacked. 

 

Twitter failing wont flush the toxins out. Social Media as a whole is the Toxin. 

[Brooksie359]

7 hours ago, wanderingfool2 said:

In general the statement was made in regards to Tesla, SpaceX, and other companies he's held.  Ultimately it's a way to ensure that the goals of the company are streamlined.

 

When companies go private like this it also often uses the value of the company to get the loans necessary for purchasing the company itself.  With that said as well, Twitter was already losing money prior to the purchase...so there is a certain amount of exaggeration that is to be expected as well.  The tl;dr, Twitter was already in a financial mess before (I read somewhere out of the tech companies they had the most employee head count per $ of revenue

I have never understood how all of these tech companies that aren't profitable end up being valued at insane values just because they have a high userbase. I think there are alot of companies like this that are just simply valued to high and it isn't until someone tries to make the company profitable that people realize it's going to be way harder than they thought to complish that and even if they did the profit wouldn't be high and not nearly high enough to justify its valuation. 

[leadeater]

42 minutes ago, Brooksie359 said:

I have never understood how all of these tech companies that aren't profitable end up being valued at insane values just because they have a high userbase. I think there are alot of companies like this that are just simply valued to high and it isn't until someone tries to make the company profitable that people realize it's going to be way harder than they thought to complish that and even if they did the profit wouldn't be high and not nearly high enough to justify its valuation. 

In a shocking turn of events it turns out the random BS people spew online isn't actually all that valuable  lol

[dalekphalm]

9 hours ago, suicidalfranco said:

since when is a forum a social media network

Since forever - forums are one of the OG Social Media Networks.

8 hours ago, suicidalfranco said:

yeeeah... nope

im not going to fall in a semantics discussion, forums are forums, sn are sn, forums are not sn and vice versa. Im done

Social Media Network is a blanket umbrella term for many sub-types of sites and services.

Take three of the largest examples of Social Media:

1. Facebook

2. Instagram

3. Twitter

 

All of these are extremely different from each other. If Facebook and Twitter are both considered Social Media Networks (which is 100% fact), then forums are not a stretch at all.

 

Image and video sharing sites like Instagram are social media. Short format blog-style post websites like Twitter are social media. Blog and Multimedia style websites like Facebook are social media. Forums are social media. Reddit is not an "image sharing site" - or rather, no more than LTT is an image sharing site. You can definitely share images on it. Just like on LTT. The image may frequently be the core topic of a thread - just like LTT.

 

But also just like LTT, there is a lot of non-image based threads on Reddit. I use Reddit daily and most of threads I'm reading on Reddit are image-free, especially the Opening Post.

[Birblover12]

9 hours ago, oali24 said:

So you're telling me that the company went from a manageable amount of debt to being at risk of bankruptcy within what? two weeks, this is completely insane.

 

I knew this was going to go downhill once they announced you could purchase verification badges. I can't wrap my head around how that update went through multiple forms of management and QC before being released, and at no part did anyone say "hey does this not, I dunno, defeat the entire purpose of the feature?".

 

Elon I feel like has his heart in the right place, just he's making all the wrong moves.

[Quackers101]

46 minutes ago, dalekphalm said:

Since forever - forums are one of the OG Social Media Networks.

Social Media Network is a blanket umbrella term for many sub-types of sites and services.

 

But also just like LTT, there is a lot of non-image based threads on Reddit. I use Reddit daily and most of threads I'm reading on Reddit are image-free, especially the Opening Post.

In short I guess, more or less a way for people being social on a platform or network etc. As with accounts and user interactions with some social aspects.

Be in mostly any form, next up VR reddit *tips the hat*

[HenrySalayne]

6 hours ago, porina said:

I don't understand how that works. If Musk was given the loans, he's on the hook, not Twitter. Twitter is now private and in a quick look Musk wholly owns it through his holding companies. 

You might think so, but no! It's way easier to get money if you sign it in the name of the company you're about to buy.

This should explain it quite well:

https://www.washingtonpost.com/business/elon-musks-twitter-deal-is-different-than-most-lbos-heres-how/2022/11/12/7c671b64-62b9-11ed-a131-e900e4a6336b_story.html

[Brooksie359]

1 hour ago, Birblover12 said:

 

I knew this was going to go downhill once they announced you could purchase verification badges. I can't wrap my head around how that update went through multiple forms of management and QC before being released, and at no part did anyone say "hey does this not, I dunno, defeat the entire purpose of the feature?".

 

Elon I feel like has his heart in the right place, just he's making all the wrong moves.

I wonder what would have happened if they had simply had the same idea but made it a separate feature from verified. Like maybe some other designation like a Twitter premium member that others could see that way people would be less likely to think you are a bot. Add on the priority in the algorithm and I could see professionals spending money on the service. Still not sure how it would go over with others but I am willing to bet it would go over better than combining it with an existing feature that alot of people use and essentially making its original purpose nonfunctional. 

[wanderingfool2]

3 hours ago, Brooksie359 said:

I have never understood how all of these tech companies that aren't profitable end up being valued at insane values just because they have a high userbase. I think there are alot of companies like this that are just simply valued to high and it isn't until someone tries to make the company profitable that people realize it's going to be way harder than they thought to complish that and even if they did the profit wouldn't be high and not nearly high enough to justify its valuation. 

In general users = money in the eyes of some investors.  Hoping it could be the next google or facebook in terms of harvesting user data to become a big name advertiser.  When people invest they don't necessarily invest in what the current profits are, but rather what the thought of future profits might be.

 

A practical example of it might also be lets say Tesla.  In 2021 they earned $1.63/share [after taking the recent split into account].  At the current value, that would be 122 years to "pay off"...But 66 million cars are sold each year worldwide, and in 2021 Tesla only sold about 1 million...so if they manage to keep scaling and sell 10 million a year (or 16%) market share which might be possible, the ROI would only be 10 years.  At least that's how I think people justify it, they try seeing value in the unrealized potential of a company.

 

It can actually make things really worse though, as you need to then pander to the shareholders...so in the case like Twitter, it's trying to hide it's performance deficiencies by creating things like the MDAU...and redefining metrics to make it look like they are improving and have potential

 

I do think Twitter is overvalued, and ultimately I think given time they would have gone bankrupt, but here is a bit of the "potential".

End of 2021, they had 14 billion in assets (7 billion in liabilities)...so one could say they are worth at least 7 billion [I know I'm glossing over a bunch]

Now sure in 2021 they lost money (they had 3 months though they made money), but what can be telling is their 2019 and 2018 years.

2019 they posted a profit of $1.85 billion

2018 posted a profit of $0.66 billion

 

I think the 2019 number says what the "hope" of what Twitter could do, as $1.65 billion would pay off the deal in less than 30 years...or to put it in other terms if the thought is that you could return to/top it lets say getting $2 billion profits a year, that would be like locking in at 4.5% interest.

 

Again, at $44 billion I think it's overvalued, but honestly the potential is there lurking about (but I don't think it would live up to that potential...as 2020-2022 showed, Twitter has had quite the bits of controversies that make them non-advertiser friendly)

 

Other issues as well, people look at revenues or news has a tendency to report things like "record profits" and everyone jumps in without thinking things through (e.g. Linus talking about the grocery stores gouging, but at least the one I checked they have maintained the same % of mark-up for cost of goods sold...just as prices raise that means they take more profit..but that doesn't necessarily mean they are gouging by maintaining the same profit %)

 

3 hours ago, leadeater said:

In a shocking turn of events it turns out the random BS people spew online isn't actually all that valuable  lol

...but GameStop and crypto, it must be surefire investments

 

6 hours ago, Beerzerker said:

As for Twitter, bankrupcy may be what it was needing all along to flush out the toxins within and start off fresh again.

It could actually allow to consolidate debts and rework things...sometimes declaring bankruptcy can be beneficial to the company (in some cases)

 

7 hours ago, porina said:

I don't understand how that works. If Musk was given the loans, he's on the hook, not Twitter. Twitter is now private and in a quick look Musk wholly owns it through his holding companies. 

Just like a house loan...except with a company.  You put a downpayment (in this case a large one), and then you leverage the value of the company towards the remainder of the loan (i.e. Twitter being part of the collateral).  Toy-R-Us actually did that back in the day as well when they went public to private.

[Spotty]

13 hours ago, oali24 said:

but twitter is important for many people's livelyhoods who make things like art on twitter and I don't think that their having a laugh over this,

12 hours ago, oali24 said:

like guys, sure you may not like twitter, but a lot of people depend on twitter for their livelyhoods

Twitter doesn't monetise user content...? How are they currently making money from Twitter? How would they be losing their livelihood if Twitter goes bankrupt?
Being solely reliant on a single website/social media platform for your livelihood is not a good business model. You see it all the time where creators are banned from platforms like Youtube or Twitch, or their content is demonetised. Nothing stopping those artists from 'losing their livelihood' if they were banned from Twitter or if Twitter made an unfavourable policy update (look at Tumblr banning porn) - it doesn't have to take Twitter going bankrupt for somebody reliant on Twitter for their income to lose their livelihood. If you fail to diversify your business then that is the risk you take.