The Fall Of Twitter (Bluesky lists ahoy)

The actual functionality of twitter must be piss easy to develop. It's just the critical mass of content and contributors that makes it unique. 


That is not beyond some other tech company or indeed a start up to achieve in time, the difference being a start up will need protection which they won't get.

 

I don't think that it's really about the 20 bucks, is it.

King brings people to twitter, his fans etc. They come because they want to read his tweets.
If twitter can't monetize that, why is it King's problem?

Any chance of a blue tick on FG?


EDIT: \o/

I like that I have 775 posts and have been here since it started but am still regarded as a new member.

His idea of equal free speech for all is already a joke when you find out one of the benefits of blue tick membership is higher priority viewing when it comes to replies and searches.

All just feels like he took that joking from Hard Drive to heart and has now gone way too far, which is kinda funny.

Don't worry, noone pays attention to the title. Keep posting friend and you'll be a full member in no time.

RealStephenKingBoobMaster42069

For me, there are several things which offer clues as to how the investment banks see this.

1. The loans are secured on Tesla stock - so they don’t care whether Musk is any good at running Twitter, because they’re financially secure either way.
2. What it does tell us is that the banks see Tesla stock as solid for the required duration before they expect refinancing or repayment. Either they think Tesla is a good long term bet, or they expect to not need it as collateral much longer than the short term.
3. So either Musk is expected to repay quickly, or fail to meet his debt servicing obligations quickly, so the banks can swoop and cover their exposure. The latter is possible but seems unlikely as Musk has a loooong track record of pillaging Peter to pay Paul when it comes to moving money from the various businesses he heads.
4. There are always banks that will offer ‘mezzanine’ debt - debt without collateral which is paid back only after other ‘senior’ debt in a wind-up situation. This debt carries eye-watering interest, God help him if this is his preferred source of funding.

So either the banks think they are getting their money back soon (either from loan repayment or seizing Tesla stock) or believe Musk can make good on his promises about Twitter becoming proftable.

Which ever they truly believe, their approach will have 100% been ‘make absolutely sure of the former and who gives a crap about the latter, great if he pulls it off but no probs if he doesn’t.’

(Has anyone seen if there’s anything about a repayment trigger tied to Tesla stock price? What happens if Tesla falls?)

That $12bn is most likely a mix of mezzanine and debt secured against Twitter assets.

Honestly I’m just on the outside looking in, but that’s how they would have structured it in my day.

The other question is: if Tesla stock craters, does he have the funds to cover the banks’ security requirements. He’s super rich on paper…

FWIW, this is how the original bid got structured.



I think the cash bit has been dramatically reduced by getting other investors on board (Larry Oracle and some Saudi prince iirc).

My take on it is he doesn't actually have a plan and is winging it. Why did he try to wrangle out of it?

I expect he doesn't really have a financially sound plan, and it's a bit of a rich man's toy/hubris/ego at play. See also Zuck and Meta.

I don't fully understand it either but from I've seen yeah: part of this acquisition was him being lent money as a conventional loan. For billions.

All of that roughly adds up to 44bn on the right axis, no?

Also I read yesterday that the banks that leant him money are holding on the debt. They were going to sell it on as bonds on market but they're now worrying they can do it with any profit it it. Presumably the risk and therefore yield is not looking so good.

At every stage, everyone seems to be doing their due diligence after the fact

Yeah but including a credit facility? Aside from the fact that the provider of that facility probably wouldn’t allow it to be used for an acquisition, that’s like maxing out your Tesco credit card when buying a Porsche.

The phrase ‘term loans’ implies that is existing debt (attached to Twitter? That’s illegal in US acquisitions, called ‘whitewashing’. From Tesla? There’s that Peter and Paul thing), basically everything apart from cash should be lumped in as ‘what the banks will take if Musk doesn’t deliver’

Not like the cash all comes from him, either, so a lot of that can be treated as ‘strings attached’.

Edit: Syndicated deal led by Morgan Stanley - I think this comes from an investor presentation TO Musk at the top of this deal, ie. if he wanted to buy Twitter, this is how he would do it. And he agreed to this structure?

Him waiving due diligence was what caused this car crash in the first place. He was trying to meme grift his 9% share to then dump it, so he did all the performance of buying twitter without realising how legally binding the contract he didn't look at was..