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Takes real talent to lose 71% of a company in a short period of time.
Musk lost 71% of his "investment". Twitter was never worth that much. Before Musk started mucking with the stock, it was worth about $29 billion, and even that's still mostly stock and investor BS. Afaik, it was rarely, if ever, actually profitable. Just a capital fund poster child with hopes of monetizing user information.
How the hell was it even worth 44 billion? I struggle to understand how twitter was ever that important and never once found a need to use it myself. I always found it strange that governments and other public entities would use it, like a city making posts about traffic disruptions, or a police dept showing off the latest drug bust via hashtags and url shortening. Fucking strange world.
It never was worth $44bn, he just threw out a sum of money he knew they couldn't say no to and then was shocked when they took him up on the offer and tried to back out.
The only surprising thing about it is it wasn't $69 billion or $420 billion.
It wasn't $420 billion, but somewhat unsurprisingly, it was still a 420 joke. He offered a share price of $54.20, which was signifigantly higher than what it was at that time trading for. Guess he was just super committed to the bit.
He was only committed to the bit when the FTC forced him to be committed.
LOL true. Not sure what the fuck he was thinking offering such a ridiculous price in the first place. Maybe just some good old fashioned stock price manipulation?
Yup. He had a 7% stake in twitter at the time amd broke the law by not reporting the size of the stake. He only made the offer after the news broke and the stock price shot the hell up. Higher offer, the higher share price jumps.
After Twitter said "you got a deal" he likely thought he could still offload that 7% then back out, but the contract was hilariously in favor of Twitter and he still signed it.
It never was. I argued with people on Hacker News at the time, and those idiots I was arguing with think that if someone is foolish enough to overpay for something, it's worth the amount they paid.
They literally believe that if someone pays a million dollars for a box of dirt, that box of dirt is worth a million dollars - no concept that it's only worth what you can sell it for.
I mean, what is your alternative definition of “worth” if it isn’t “What you can get for it”
Like you’re right that a valuation of something is not definitive to something’s worth, until somebody, anybody is willing to buy it for that much. After which, the worth could change.
So if I sell a box of first for $1 million, and somebody is willing to buy it, it is in fact worth $1 million. However once that fella buys it, it isn’t necessarily still worth $1 million anymore.
The alternate definition is "discounted future earnings".
So if I have a cardboard box with $100 inside, it's worth $100 even if nobody will buy it.
If I have a machine that will print an authentic $100 bill exactly once, it's worth $100 even if nobody else believes it will work.
Thus, something can be worth more (or less) than its selling price.
But how do you define the value of a $100 bill? Is it worth one hotdog, 100 hotdogs or as many hotdogs as someone is willing to trade for it?
I mean, what is your alternative definition of “worth” if it isn’t “What you can get for it”
"Worth" and "Price" are different things. A meal that costs $20 has more worth than a box of dirt with a price sticker of $1 million.
The $44 billion Muskolini paid was Twitter's agreed price, not it's worth.
Yes, and I was inundated with techbros claiming that's not how it works. I mean there is some argument in some cases where you can get some tax write off based on losses, but a true valuation is only what you can sell for.
I'd say worth would be an average of all possible sale prices for an asset. As opposed to the single sale price to a megalomaniac.
That doesn't make much sense.
Suppose I have a trinket that everyone knows you are willing to pay $100 for.
If I offer it to someone else, they should be willing to pay me something pretty close to $100. Because if I sell it to them for $99, then they can sell it to you for $100.
And in fact as soon as Elon announced he wanted to buy Twitter, the stock price shot up. Other people wanted to buy it for nearly the same price, in order to sell it to Elon.
I argued with people on Hacker News at the time, and those idiots I was arguing with think that if someone is foolish enough to overpay for something, it's worth the amount they paid.
I remember when hackernews was pro-NFTs.
I swear real engineers don't use hackernews, and it's full of wannabe startup dudes and rise-and-grind folks.
You may be right. I've also noticed it seems the user base has changed over the years. It used to be that many of the people on HN were actually devs and many of them were based in Silicon Valley. Many commenters in years past were closely connected to the companies and people in the bay area tech scene. That's no longer the case.
Recently, I saw a thread regarding Netflix releasing their streaming data - and there were multiple people starting the reasons why Netflix released the data, and they were authoritatively posting that is was a strategic move, or that they were positioning their ad sales teams to have ammunition for 2024.
Then, a few days later, it was revealed that the reason Netflix released their stats was that is was part of the new SAG agreements. Not ONE of the Hacker News 'experts' were even close. Not ONE of them even mentioned the new SAG contract. They had no idea what they were talking about.
Yeah, feels like a real misunderstanding of what one person is willing to pay vs what people are willing to pay.
It was never worth that. It was at most half that. But Elon Musk claimed he would buy it, but Twitter responded that it was NOT for sale. Then Musk offered double the value, and Twitter said....
OK! Thank you very much. 😀 🤪 😋 😜
Then Musk tried to get out of the deal, but he couldn't because there are laws about that stuff, something Musk is used to not having to care about, because his lawyers handle such issues for him.
He ended up having to pay, but he got some stupid people to help him finance it, making him potentially only lose half! He loaned half the money at a high interest rate in Twitter, so Twitter would have to pay it, leaving Twitter with a loan on top of already existing debt, that was to the amount of the total actual worth of Twitter sans the Musk offer. Why anyone would agree to loan Twitter money under such conditions is very strange, but the interest rate was high. Still there is no way a company already running at a deficit can service such a loan. But Musk is a shrewd conman, and he probably promised all sorts of mindbogglingly profitable businesses he would turn Twitter into.
Of course as the idiot he is, Musk then sued the Twitter lawyers for forcing him to buy at the price he had himself offered unconditionally, because why the hell not, lawyers are people too, and they need to earn a living.
So just to make sure everything was fine, he fired 80% of the people that worked at Twitter, closed one of the datacenters, and Tweeted some racist antisemitic shit, so he lost 70% of his advertisers.
And lately he has been severely butthurt that things aren't going well, saying to advertisers they can go fuck themselves, and claiming the earth will know the truth, which he intends to document in great detail.
So now the company has no internal value, and a bankruptcy will result in Zero money back to Musk. 22 Billion out the window for Musk, and another 22 Billion for those who helped him.
Prior to musk buying it, although twitter usually made a loss it had had a couple of years when it made a profit. He didn't buy a business that was already destined to fail, he bought one with potential and made it fail.
Absolutely,In 2021 Twitter had a write off about $600mil, and without that they would have made a decent profit of about $200 Million.
Twitter was absolutely on track to become profitable, with a total revenue of $5 bil up 35% YOY.
https://www.tipranks.com/stocks/twtr/financials/income-statement
If "the thing formerly known as Twitter" fails, it's 100% Elon Musk.
It wasn't. Musk was blowing hot air and offered a stupid-high share price. Twitter sued to force him to honor that price.
My understanding is that he was basically trying to manipulate the stock price by publicly offering a sum, and he couldn't back out without very clearly breaking SEC laws saying you can't use your influence to directly manipulate the stock market.
Maybe, but I really believe he was just shitposting and got called on it.
Lots and lots of people love parasocial relationships with celebrities, love throwing idiotic over simplified /but effective/ political slogans and newsbites around, and of course attempting to become 'thought leaders' or 'influencers' of some kind.
People then get addicted to the constant flow of 'content' and forget how to live without it.
Basically, it was perfect for the vapid and vain and uncritical people, and as it got more popular, network effect took over to the point well everyone is using it so we should too!
The company has rarely posted profits in its entire history.
It does not have any interesting technology or ideas as a service, app or website, it simply /had/ a large user base, which is basically now dwindling as Musk has proved to be the most incompetent manager of any large social media service that has ever existed.
Even more hilarious, a huge reason Musk bought Twitter was because he believed conspiracy theory type logically inconsistent right wing nonsense about how Twitter was suppressing right wing voices when empirically this could not have been farther from the truth, and then proved all his contradictory notions of how society should work are in fact nonsense with his insane decisions.
He basically acted like a 16 year old 4channer trying to moderate his personal private forum for an edgy video game community for the first time, but applied this kind of thinking to a platform of hundreds of millions of people.
And he is still acting this way, telling advertisers to go fuck themselves and then spinning a story in his head about how he can do no wrong and everyone is evil and out to get him, that the people of Earth will judge advertisers for destroying the one holy website that connects us all.
Paranoid megalomaniacal delusional sociopath.
Ah yes, that makes sense, because Musk bought it at twice what it was worth. /S
Meaning we start at 50%, so valuing it at 28.5% makes no sense, after Musk increased cost to run the company with a high interest loan that cost 1.5 Billion per year in interest. Money that didn't go into the company, but Musk used to finance the purchase. Then he drove away about 70% of advertisers, and the company is basically bankrupt from those two issues.
The real value is technically zero, because it has negative internal value, and it is running at huge deficits. But if you say there is hope as long as you live, and if you believe Musk is a financial magician, you may attribute some value from that. But again the value is technically as close to zero as you can get for a company that isn't actually bankrupt with vastly negative assets.
It's value is for pushing propaganda there is a reason the Saudis gave musk money
That's only a value if someone wants to actually pay for it. The Saudis lend the money at a high interest rate.
Maybe it has value to them to just get it shut down? But why would that be worth 22 Billion plus a long term intensive engagement that threatens to hurt his other businesses too to Musk?
Musk is an idiot Nazi who wants a dictator to rule USA, because a dictator is inherently corrupt, so Musk can easier influence a dictator than a democracy. I sure hope USA doesn't give Musk that victory.
That estimate seems fairly high.
edit: Just to be clear, I'd be surprised it it is worth even $5Billion now.
Wait, but Joe Rogan and his chubs were saying how Musk was a genius businessman and will fix the boys problem and turn it into a free speech utopia. /s
Joe Rogan chubs..... Not something I ever want to think about. But to be fair, I'm sure a lot of his chuds have chubs for him.
You mean allowing Nazis to run rampant on the platform turns off major advertisers?
At the end of the day I can only think that some idiot, who this life has given more wealth than they deserve, spent $44 billion on electricity. It really would be hilarious if I didn’t know where all the money could’ve gone to actually benefit humanity.
It really would be hilarious if I didn’t know where all the money could’ve gone to actually benefit humanity.
True. Societies really shouldn't allow billionaires at all as long as there are people who struggle to put food on the table.
And this year it will drop further!
Yeah but how good does Elon feel about himself now that he has a large forced audience?
It’s a great deal unless you’re one of his investors.
I was wondering what that large X close symbol was on imbedded Twitter posts was...
$12.5bn is still too high. When Musk bought it, maybe it was worth $8B, but since no one has figured out a way to make Twitter profitable, even that figure would be based mostly on equipment, branding, etc. Since Musk had bought it I say ita worth maybe $3B and will continue to drop.
There's no revenue and Musk has no ideas that hadn't already been tried.
It's dead, how has it retained even this much? I think he would have a hard time selling it for even a fraction of that valuation.
Well my suspicion is the main reason for the name change is to preserve some of the value of the Twitter brand. When Musk's site inevitably dies, someone else can buy it up cheap.