UPDATE Jan 4th, 2023 Twitter has not paid rent for some of its offices, including its San Francisco headquarters, for several weeks as it tries to renegotiate its leases, reports the New York Times. The newspaper also reports that the social media company is refusing to pay an almost $200,000 bill for private flights made around the time of Musk’s takeover. The missed payments are part of an overall drive to cut costs at the social media company. Musk laid off around half of Twitter’s staff soon after he became CEO. Former employees complained in November that the social media company had yet to reimburse them for expenses incurred when they were still working for Twitter. Executives at Twitter are now exploring whether they can deny severance payments to those who were laid off, the New York Times reports.
Mr Musk, “You can fool all of the people some of time; you can fool some of the people all of the time, but you can't fool all the people all the time.” Attributed to Abraham Lincoln in The New York Times, August 27, 1887. Elon Musk Secured $46.5 Billion In Financing For Twitter, Over $20 billion would come from varying loans from Morgan Stanley, according to a new SEC filing. Another $21 billion will come from equity financing. Twitter, Inc. (NYSE: TWTR) announced that it has entered into a definitive agreement to be acquired by an entity wholly owned by Elon Musk, for $54.20 per share in cash in a transaction valued at approximately $44 billion. Upon completion of the transaction, Twitter will become a privately held company. Mr. Musk has secured $25.5 billion of fully committed debt and margin loan financing and is providing an approximately $21.0 billion equity commitment. There are no financing conditions to the closing of the transaction. Musk will provide much of the funding after selling down his stake in electric vehicle maker Tesla Inc and by leaning on equity financing from large investors, major banks have committed to provide $13 billion. BAD SIGN!
Twitter does not charge a subscription fee from it's users, it relies solely on advertisers to support the company. Half of Twitter's top 100 advertisers have halted spending on the platform since Musk took over the company at the end of October 2022. The New York Times article seems to suggest that Twitter is insolvent and choosing not to pay all sorts of bills, many of which will expose them to genuine legal jeopardy. We've previously reported on their auctioning off of all sorts of assets, and Twitter's looming wrongful termination and discrimination lawsuits, so when the NYT stacks it all up in one article, the strategy seems to be bankruptcy. With interest on his loans totaling over $150m/month and a company grossing $5B before screwing it all up and chasing the advertisers out, Twitter's reluctant purchaser Elon Musk seems to be running out of options.
Twitter regularly loses money. But Elon Musk took on billions in debt to buy the company at a time when online advertising is slumping. Firing Twitter employees by social media, giving others an ultimatum, and battling possible bankruptcy: the latest actions by Elon Musk. Elon Musk, in his first address to Twitter Inc. employees since purchasing the company for $44 billion, said that bankruptcy was a possibility if it doesn’t start generating more cash, according to people familiar with the matter. The threat of bankruptcy is credible. Ed Zitron and Catherine Fisk describe the way Musk has gone about taking over Twitter as "insane" and "crazy." The company's financial outlook is bleak as many advertisers have taken a "wait-and-see approach" in the meantime. Elon Musk Fires Twitter Employees Who Criticized Him. Twitter under Musk's control, talks of the company going bankrupt have circulated. Elon Musk tells SpaceX employees that Starship engine crisis is creating a 'risk of bankruptcy'.
Twitter owner Elon Musk spoke out on Saturday evening about the so-called “Twitter Files,” a long tweet thread posted by journalist Matt Taibbi, who had been provided with details about behind-the-scenes discussions on Twitter’s content moderation decision-making, including the call to suppress a 2020 New York Post story about Hunter Biden and his laptop. His first drop, which was advertised by Musk as a bombshell and ‘awesome,’ was instead largely seen as lackluster. Musk on Saturday also criticized the mainstream media for downplaying the “Twitter Files” release, while accusing news organizations – particularly the New York Times, the Wall Street Journal and the Washington Post – of “setting agendas.” In its coverage of the story, the Washington Post had concluded “it produced no smoking gun.”Dec 12: Twitter disbands Trust and Safety Council. Twitter is dissolving its Trust and Safety Council, which included expert organizations who advised the company on issues such as online safety, harassment, child sexual exploitation and other important topics. A page for the council is no longer available but an archived version showed the council was made up of the Anti-Defamation League, the Center for Democracy and Technology, the Trevor Project and more. The move comes after three members of the council resigned because of user safety concerns and it raises questions about how Twitter will properly tackle harmful content moving forward.
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