Barely two months following getting his hands on Twitter, Elon Musk is already looking for fresh money in the face of a difficult financial situation. On Friday, his financial advisers contacted several investors to offer them to buy part of the capital of the social network from the blue bird. However, the conditions seem unfavorable: 54.20 dollars per share, the price paid by the billionaire. A rate that he himself described as excessive in October, while ensuring that “the long-term potential [était] much bigger”. To finance the losses of his new company, Elon Musk is also endlessly selling Tesla shares. Last week, it once more sold for 3.6 billion dollars of titles, bringing its sales to nearly 40 billion since the beginning of the year.
archyde news revenue – Shortly following taking power, Elon Musk assured that Twitter was losing 4 million dollars a day, or nearly 1.5 billion on an annual basis. Since then, the social network has laid off a very large part of its employees. And seeks to drastically lower its costs, to the point of refusing to pay its rents in order to be able to negotiate them downwards. The Tesla boss had also acknowledged that Twitter’s revenue was down sharply. Many brands have indeed preferred to suspend their campaigns while waiting to see more clearly, especially on the new moderation policy. According to data from Similarweb, monthly visits to the platform for advertisers rose from one million to just over 150,000 in November.
Heavy debts – The proliferation of controversial decisions and controversial messages from the boss does not bode well for the moment. To compensate for the decline in revenue, Elon Musk is relying heavily on paid subscriptions, including Twitter Blue, which has just been relaunched. But their true potential has yet to be demonstrated. The financial situation is all the more complicated as the company is now heavily indebted. To finance the takeover, the entrepreneur borrowed 13 billion dollars from major banks, part of which at double-digit rates. From next year, Twitter will have to pay a heavy bill: 1.2 billion dollars in annual interest, or almost a quarter of the turnover achieved in 2021.
Friendly Investors – In November, Elon Musk had thus recognized that “several billion dollars” will be lacking in 2023. Too much for Twitter’s cash alone, which was less than three billion in June. The billionaire can still sell new Tesla shares. But this is seriously starting to annoy the shareholders of the electric car manufacturer, who no longer hesitate to express their dissatisfaction when the action has fallen by more than 60% in 2022. Another solution therefore: solicit the investors who participated in the takeover . Of the 44 billion dollars, at least seven billion were contributed by Larry Ellison, founder of Oracle, or the Sequoia and Andreessen Horowitz funds. Friends of Elon Musk, who might still help him.
For further:
– Elon Musk disavowed by Twitter employees
– Mastodon benefits from the takeover of Twitter, but for how long?
