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points by Gareth321 3 days ago | 0 comments
> If the company really did continue to operate in the same manner, it wouldn’t have been worth 80% less in 2024 (https://www.cnn.com/2024/10/02/business/elon-musk-twitter-x-...), nor would it need to be rolled up and financially engineered into being part of an AI company that then gets rolled into a rocket company.

Musk paid an absurd premium for the company. Far more than it was worth. It was intended to force the board to sell. So an 80% estimated drop (it’s private so it’s a very rough estimate and I won’t go into the various reasons you should not accept it at face value), sounds scary but it’s by design.

Twitter as a company was doing quite poorly leading up to the acquisition. It lost more than $1.3B in the two preceding years. A big downgrade from its previous $1B+ annual reported profits.

As for the 81% headcount reduction, Musk confirmed that, but if you think he’s lying about that for some reason, CNBC investigated it. Journalists examined internal Twitter records and reported approximately 1,300 actively working employees, with another 1,400 still receiving pay but no longer working. CNBC also interviewed two recent employees who corroborated the scale of the reductions. https://www.cnbc.com/2023/01/20/twitter-is-down-to-fewer-tha...

Prior to acquisition, Twitter's SEC filings confirmed more than 7,500 full-time employees.

I don’t see why this claim is so unbelievable. Twitter was famous for its army of social media staff whose entire day comprised two meeting between matcha tea and meditation. https://youtube.com/watch?v=buF4hB5_rFs

Musk just fired everyone who wasn’t an engineer and it turns out the engineers keep the lights on.

[–] darth_avocado 3 days ago
I don’t see anything in what you wrote really support that Twitter did well after firing 80% of its staff.

As for this:

> Twitter as a company was doing quite poorly leading up to the acquisition

This is objectively false. 2020 revenue for Twitter was $3.71B while 2021 came in at $5.07B. The company was on a growth trajectory and path to profitability.

In fact, after the acquisition, the ad revenue dropped by a lot. https://www.businessinsider.com/x-revenues-plunged-months-af...

All of this is public information.

[–] Gareth321 3 days ago
> I don’t see anything in what you wrote really support that Twitter did well after firing 80% of its staff.

That’s because I didn’t make any claims about X’s financial performance. I was explaining to you why you were wrong on some important facts.

> This is objectively false. 2020 revenue for Twitter was $3.71B while 2021 came in at $5.07B.

First, you’re conflating revenue and profit, which is kind of unforgivable in this context. Second, I explained that in those years they made large profits. In my comment. Which you clearly didn’t read.

If this is just where you like to emotionally vent may I instead recommend Reddit? I like the interesting discussions here.

[–] darth_avocado 2 days ago
> That’s because I didn’t make any claims about X’s financial performance. I was explaining to you why you were wrong on some important facts.

Again, you added nothing and are suggesting I was wrong on some facts? Can you point to my comment that you responded to provide the fact that I was wrong about?

> First, you’re conflating revenue and profit, which is kind of unforgivable in this context

Err I am not? Seems like you’re intentionally misrepresenting what I’ve said.

> this is just where you like to emotionally vent may I instead recommend Reddit

Seems like you’re the one intentionally or unintentionally engaging in a Reddit like discourse. In sister comment you say Elon Musk was the only investor in Twitter which quick Google search will tell you is incorrect. I feel you need to hold yourself to the standard that you accuse me of not having.

[–] Rapzid 3 days ago
You're argument was Musk and his investors designed an 80% drop in valuation post purchase?! LOL!?
[–] dcrazy 3 days ago
No, Musk designed an offer that forced the board to sell to uphold its fiduciary duty to shareholders. (And then famously got cold feet about it, but it was so well-designed that he couldn’t shirk it.)

The valuation crashing back to reality after going private, and therefore being measured by its intrinsic worth rather than whatever the latest trader paid for a share of it, was an inevitable but meaningless consequence.

[–] Rapzid 3 days ago
Meaningless to who? The employees? The investors?

Twitter has become text book bad purchase, bad management, and worst "rebranding" in history.

[–] dcrazy 3 days ago
Meaningless to the investors, including employees with vested RSUs. They got bought out at $54.20, way above the soon-to-become market value.

It was meaningless to Musk for all of about a week, when he came off his ketamine binge and realized what a stupid offer he’d made. But it was a done deal by that point.

According to Reddit[0], it might not have been meaningless to employees with unvested RSUs. They lacked an acceleration clause, so instead of immediately becoming 100% vested at $54.20, the schedule remained intact with a cash payout instead of stock. If the cash payout was relative to current company value, then it was a massive hit.

[0]: https://www.reddit.com/r/Twitter/comments/yykn1e/if_you_work...

[–] Rapzid 3 days ago
I'm not talking about those investors and employees.

I'm talking about the investors and banks that ponied up over half the purchase funds, and the employees that didn't have life changing payouts who were laid off.

I suppose he has the money to pay back the investors and banks now though. Not sure what kinda return they were expecting vs what they got.

[–] Gareth321 3 days ago
Elon Musk was the only investor. Which investors are you referring to? And yes, when you pay a premium for stock, you’re paying more than the intrinsic value. This was widely reported so I don’t understand why you would pretend that it’s a big secret.