Latest / Elon Musk Podcast / Saving Twitter: The Elon Musk Challenge

Transcript

Saving Twitter: The Elon Musk Challenge · Elon Musk Podcast

• 0:03
  Hi and welcome to another episode of the Elon Musk podcast
• 0:06
  where we delve into the latest developments in the world of
• 0:09
  Tech, Finance and innovation. In this episode, we take a deep
• 0:13
  dive into the financial challenges facing Elon Musk and
• 0:16
  is social media. Acquisition of Twitter now is
• 0:19
  one of the world's most influential Business Leaders.
• 0:22
  Elon Musk is facing immense, pressure to turn Twitter into a
• 0:26
  profitable business and despite musk's ambitious plans for the
• 0:30
  Platform. Twitter continues to struggle
• 0:32
  with a high cost, debt burden and a decline in Revenue.
• 0:36
  So, join us, as we explore the future of Twitter, under the
• 0:40
  leadership of Elon Musk. Now, Twitter's kind of facing an
• 0:45
  existential crisis right now, Elon Musk, the company's owner,
• 0:49
  and CEO Under Pressure to turn the social media platform me to
• 0:52
  a cash flow, positive business, and nearly five months after
• 0:56
  musk's forty four billion dollar.
• 0:58
  Take over Twitter is Still burning through cash, in the
• 1:01
  company's financials remain strained, due to an Advertiser,
• 1:06
  pull back and high-cost debt. Now, to stem, the cash burn musk
• 1:11
  is taken aggressive steps to cut costs, including reducing
• 1:14
  Twitter's task force by about 75%.
• 1:19
  Now, speaking at a Morgan Stanley conference musk said,
• 1:22
  Twitter has a shot at being cash flow positive in the second
• 1:25
  quarter and analysts and academics agree that this would
• 1:29
  give him the The time he needs to develop and build out, new
• 1:32
  revenue streams. Now, Twitter has to keep up with
• 1:36
  quarterly. Interest payments are the 13
• 1:38
  billion, dollars of debt that helped pay for musk's purchase
• 1:42
  of the company. It had less than 600 million
• 1:45
  dollars in net debt before the Takeover and the company has to
• 1:48
  pay 1.5 billion dollars a year in interest costs while its
• 1:53
  annual operating costs are now close to 1.5 billion dollars.
• 1:58
  Now Twitter has also been hit with lawsuits from landlords
• 2:01
  consultants and vendors who claimed that Twitter hasn't paid
• 2:04
  its bills and Twitter told investors that.
• 2:07
  It recorded decline of roughly 40% year to year in both revenue
• 2:12
  and adjusted earnings in December.
• 2:16
  Twitter's businesses were stagnating before, musk's take
• 2:20
  over it, hasn't booked an annual profit since 2019 and it posted
• 2:24
  a loss for eight years of the past decade and to lift Revenue
• 2:30
  musk is looking to relaunch a paid Subscription Service.
• 2:33
  Twitter blew on numerous levels, which will allow users to edit
• 2:37
  tweets Test new features before. They are made available to other
• 2:41
  normal users and other options available.
• 2:45
  Oil for the future. Now, Twitter blue has as many as
• 2:48
  450 thousand subscribers, according to estimates from
• 2:52
  Travis Browne a berlin-based software developer who tracks
• 2:56
  social media Platforms in must cause cutting efforts, have
• 3:00
  involved slashing headcount, which he said in December was
• 3:03
  down to roughly 2,000 from nearly 8,000 people before the
• 3:08
  acquisition Twitter laid off and another round of workers last
• 3:12
  month. And they may continue on this
• 3:14
  trend for the foreseeable future.
• 3:17
  Now, there is some path to survival for Twitter as well.
• 3:21
  It's on a path to break. Even in about nine months said,
• 3:24
  Daniel lives a managing director at Financial Services firm,
• 3:27
  wedbush Securities Inc, the social media company likely will
• 3:30
  have to demonstrate. It has a stabilized business
• 3:33
  model before it receives another infusion of capital and a
• 3:37
  renegotiation of the terms of the interest payments might
• 3:41
  offer Twitter and musk some respite for Us the bank
• 3:45
  Syndicate that put together the loan backing musk's acquisition
• 3:48
  has been struggling to sell that debt to third-party investors
• 3:51
  and his team. Also held talks with investors
• 3:54
  about selling them to three billion dollars in new Twitter
• 3:57
  shares to repay some of that debt.
• 4:00
  Now Ilan, if not the world's richest person, he's the second
• 4:04
  richest person in the world. Could continue making interest
• 4:07
  payments on Twitter's debt by ejecting more of his personal
• 4:10
  wealth or finding other Equity investors.
• 4:13
  And another option would be to sell more Tesla Inc stocks which
• 4:18
  would likely future shrink, the electric vehicles, market,
• 4:23
  share, and musk, who is also the CEO of Tesla sold shares in the
• 4:28
  car maker, in November yielding almost four billion dollars.
• 4:32
  Instead, the sale was partly due to Twitter, he said a December,
• 4:35
  he wouldn't sell more Tesla shares for at least, 18 months
• 4:39
  and that seemed to stabilize the Tesla shares at that.
• 4:43
  Point. Now must could strike a deal
• 4:46
  with lenders to pay a payment extension restructure, the debt,
• 4:51
  obtain a covenant, waiver or make other changes to loan terms
• 4:55
  in the chief executive could also eventually buy some of the
• 4:59
  debt in potentially take full ownership Twitter, such as
• 5:02
  purchase could take the debt off of the company's balance sheet
• 5:07
  and put it all in the hands of Elon Musk.
• 5:10
  Now, I want to ask you for a favor real quick.
• 5:13
  Could you please hit the subscribe, a button on whatever
• 5:15
  podcast platform that you're on right now, it would really help
• 5:18
  out the show and could get you back here so you can listen to
• 5:22
  more Elon musk's news. If you like Tesla, if you like
• 5:25
  SpaceX, if you like the boring company or Twitter does hit the
• 5:28
  Subscribe button, we do these shows almost every day.
• 5:31
  I think, I don't think we missed a day for the last two hundred
• 5:33
  and forty four days or something like that.
• 5:35
  So, please hit the Subscribe button, you'll get the latest
• 5:37
  news on your podcast app. Now, musk's team held talks with
• 5:43
  investors about selling up to three billion dollars and do
• 5:46
  Twitter shares to repay some of the debt and Equity raise.
• 5:49
  If successful could be used to pay down in unsecured portion of
• 5:53
  the death that carries the highest interest rate within the
• 5:56
  13 billion dollar, Twitter loan package, however, the company's
• 6:01
  small group of debt holders might team up and use their
• 6:04
  bargaining power. To restructure the debt only, if
• 6:06
  musk injects more Equity, or by some of that debt, Now, if musk
• 6:12
  is unable to secure additional debt or Equity, bankruptcy could
• 6:16
  be in the carts potentially through a technical default or
• 6:21
  failing to pay interest costs through analysts and economics,
• 6:25
  they said that that move doesn't appear to be imminent and musk
• 6:29
  is talking on Twitter, a lot and in February, he said the
• 6:34
  previous three months were extremely tough as he rushed to
• 6:37
  quote save Twitter from bankruptcy company.
• 6:40
  He's that go through bankruptcy often change top management and
• 6:44
  filing for bankruptcy protection would likely Wipeout musk's
• 6:48
  personal investment. But it would also allow him to
• 6:51
  negotiate with creditors in a single form and raise new debt
• 6:54
  from senior lenders. According to Josh, White and
• 6:58
  assistant professor of Finance at Vanderbilt University and a
• 7:01
  former Securities and Exchange Commission Economist.
• 7:05
  Now, bankruptcy protection would allow interest to stop accruing
• 7:09
  on any unsecured claim. Names such as accounts, payable
• 7:12
  or loans not secured by elon's Tesla stock in contrast with a
• 7:17
  private deal with lenders. And Twitter is not the only
• 7:20
  social media platform struggling right now.
• 7:23
  There's a Slowdown in the online Market altogether.
• 7:25
  Maybe digital ad platforms face, similar issues amid concerns
• 7:29
  over a potential economic downturn.
• 7:32
  However, Twitter situation is unique in that the company has a
• 7:35
  huge debt burden has been unprofitable for years.
• 7:40
  And for Twitter to thrive needs to attract new users, create
• 7:43
  compelling content and monetize its platform more efficiently.
• 7:47
  This is a difficult task given the intense competition in the
• 7:51
  social media space in the current economic environment.
• 7:54
  However, with musk's resources and vision, it's not really that
• 7:58
  impossible. If you think about it, Twitter
• 8:01
  has a very loyal user base. The values, the platform's
• 8:03
  ability to connect people and share information is also been
• 8:07
  an important platform for political.
• 8:09
  Disclosure disclosure and activism if must can leverage
• 8:13
  these strengths while developing new revenue streams, Twitter
• 8:17
  could become a thriving business again, and one potential area
• 8:20
  for growth is e-commerce. Twitter could become a platform
• 8:25
  for buying and selling products similar to Instagram and
• 8:28
  Facebook. In this would require
• 8:30
  significant investment in infrastructure and Partnerships
• 8:33
  with retailers, but it could be a lucrative Market another area
• 8:38
  for growth is in premium. Content.
• 8:40
  Twitter could partner with media companies to create exclusive
• 8:43
  content. That users would be willing to
• 8:45
  pay for this. Could include Live Events such
• 8:47
  as concerts and sporting events as well as original programming.
• 8:52
  And Twitter could also leverages data to provide targeted,
• 8:55
  advertising and insights to businesses, this would require a
• 8:58
  significant investment at data analytics and machine learning,
• 9:01
  but it could be a lucrative market for the future.
• 9:05
  Now, Elon Musk faces, significant challenges turning
• 9:08
  Twitter into a profitable Able business, whoever with his
• 9:11
  resources, the people around him, and his vision.
• 9:15
  It doesn't look like it's going to be a possible.
• 9:18
  He needs to focus on cutting costs, developing new revenue
• 9:21
  streams and attracting new users.
• 9:24
  He also needs to be strategic and managing Twitter's debt, and
• 9:27
  negotiating with creditors. And if you could do all those
• 9:31
  things, Twitter could become a thriving business in a valuable
• 9:34
  asset in musk's portfolio of companies.
• 9:38
  Thank you for listening to the Elon Musk podcast.
• 9:41
  I appreciate you here. If you could check out our
• 9:44
  sponsor Starships shirts.com, they're our partner here and you
• 9:47
  can get Elon musk's SpaceX NASA, inspired gear for really great
• 9:53
  prices and the really great quality.
• 9:55
  I'm wearing a what is a raptor engine t-shirt right now and
• 10:01
  it's really cool. It's really nice.
• 10:03
  And the cut is very comfortable and the Stitching is very nice,
• 10:09
  very sturdy but also very soft in the the fits really cool.
• 10:13
  I like it. So check it out.
• 10:14
  Starship shirts.com, go check them out and I'll so that's
• 10:19
  about it for today. Thanks for listening and thanks
• 10:21
  for subscribing to the show. Zero Productions and hosted by
• 10:32
  me. Will Walden.
• 10:34
  We hope you've enjoyed today's episode and gain some valuable
• 10:36
  insights. If you haven't already, be sure
• 10:39
  to subscribe on your favorite podcast app so you never miss an
• 10:42
  episode. And for exclusive add free
• 10:45
  content. Check out our patreon at
• 10:47
  patreon.com slash stage Zero. Thanks for listening and we'll
• 10:51
  see you next time.