Will Twitter go bankrupt?

[tede02]

This whole thing has simply been entertaining to follow. It can't be good if Musk is already looking to raise money and polling whether he should step down. 

[ValueArb]

Twitter can't go bankrupt. Elon isn't going to throw away $44B by refusing to put a couple billion more in every so often to keep it afloat. Plus burn rate has to be dramatically lower given no one even works there anymore.

 

Elon will find a face saving way to step away and have someone else run it at roughly cash flow break-even until he can find someone to buy it (the Saudis?) for $20B or so.

[LC]

Elon is going to have to make some real promises to get someone to take this off his hands. Hope his hair plugs are in tight.

[rkbabang]

Twitter isn't going bankrupt.  He's going to cut expenses to the bone and keep it running.  He won't make his money back and it won't ever be thought of as a great investment for him.  But there is no reason he can't keep it as a going concern.   Twitter was mismanaged from the start and Musk vastly overpaid for it.  None of that means it will go bankrupt.

 

[formthirteen]

Elon said in a Spaces chat that he expects the company to be break-even next year. Without the layoffs he said they would have lost $3-4B, with $1B in cash that w0uld have meant bankruptcy, if I remember correctly...

Edited December 21, 2022 by formthirteen

[Castanza]

Twitter should just make you verify with a ID or Drivers License to sign up for an account and call it a day.  

[Guest]

1 hour ago, rkbabang said:

Twitter isn't going bankrupt.  He's going to cut expenses to the bone and keep it running.  He won't make his money back and it won't ever be thought of as a great investment for him.  But there is no reason he can't keep it as a going concern.   Twitter was mismanaged from the start and Musk vastly overpaid for it.  None of that means it will go bankrupt.

 

 

+1

[Gregmal]

Wasn't twitter going to shut down a few weeks ago or were we lied to again?

[Santayana]

Maybe he can get Trump to take the CEO job.

 

[ValueArb]

Twitter lost $100M the last 12 months on a GAAP basis. It's negative FCF was much higher, $800M, but as of June 30 had $6B in cash and cash equivalents with no short term debt. 

 

While I'm sure revenues have taken a steep decline, costs should be down by at least 50% since they are primarily headcount. I think Elon is a drama queen who loves to make employees think their back is against the wall because he believes it will motivate them.