Elon Musk's acquisition of Twitter has proven to be a financial disaster, with advertising revenue plummeting and the business struggling to generate profit. Musk's overpayment for the platform and the accumulation of debt have worsened the situation.
A year ago last Friday Elon Musk took control of what was then Twitter . It’s not been a good year for Musk, his bankers or for many of the users of the platform now known as “X.”
Meanwhile, with the interest on the $US13 billion of debt ticking away, X has negative cash flows and the banks are restless. If X is worth only $US15 billion, not only would the equity holders be wiped out, but the banks would also be facing massive, multi-billion dollar losses. Estimates that they would take a $US2 billion hit if they tried to offload the debt today appear extraordinarily generous when a highly sophisticated institutional investor believes it is worth almost $US30 billion less than Musk and his financiers paid.
Musk’s pursuit of his version of free speech has shifted the formerly left-leaning balance of posts on Twitter towards the right on X. “It would blow my mind if we don’t have that rolled out by the end of next year,” he is reported to have said.
Elon Musk Twitter Acquisition Debt Advertising Revenue Financial Troubles