Musk Proposes to Buy Twitter for Original Price of $54.20 a Share

[Emjay]

A few reasons.

The business could be a competitor and you want the IP, distribution channels, staff, products etc...
It'll be cheaper than creating this from scratch.

It could be a supplier, your products need these inputs.

You could want to put them out of business.

They have assets that you want.

You think you can run it better... kinda like what Elon is doing.

Yes, and all of those reasons are to pursue profit. In a sustainable business, all those actions would lead to improved profits (either through more product sales, reduced operational expenses, etc).

I am going to say it again. Twitter is an established company. It is 16 years old. It has posted profits in only 2 of those 16 years. Ongoing and recurrent losses to this extent talk to bigger issues in the company. Yes, profit is not the only indicator of sustainability in a start up. There are valid accounting reasons why a company may be breaking even in cash flow, but may be posting losses. However, sustained and ongoing losses are not sustainable. Most companies do not operate in the tech bubble, and using these companies as examples of what works and what does not really does not speak to the realities faced by day to day investors or business owners.

 

[Tim_vb]

Yes, and all of those reasons are to pursue profit. In a sustainable business, all those actions would lead to improved profits (either through more product sales, reduced operational expenses, etc).

I am going to say it again. Twitter is an established company. It is 16 years old. It has posted profits in only 2 of those 16 years. Ongoing and recurrent losses to this extent talk to bigger issues in the company. Yes, profit is not the only indicator of sustainability in a start up. There are valid accounting reasons why a company may be breaking even in cash flow, but may be posting losses. However, sustained and ongoing losses are not sustainable. Most companies do not operate in the tech bubble, and using these companies as examples of what works and what does not really does not speak to the realities faced by day to day investors or business owners.

Jumping your interest expense from ~$100M p/a to ~$1B p/a without a massive increase in cash flow is another sure way of wrecking a company. Happened a few companies after private equity buyouts including Edgars.

 

[quovadis]

Yes, and all of those reasons are to pursue profit. In a sustainable business, all those actions would lead to improved profits (either through more product sales, reduced operational expenses, etc).

I am going to say it again. Twitter is an established company. It is 16 years old. It has posted profits in only 2 of those 16 years. Ongoing and recurrent losses to this extent talk to bigger issues in the company. Yes, profit is not the only indicator of sustainability in a start up. There are valid accounting reasons why a company may be breaking even in cash flow, but may be posting losses. However, sustained and ongoing losses are not sustainable. Most companies do not operate in the tech bubble, and using these companies as examples of what works and what does not really does not speak to the realities faced by day to day investors or business owners.

How do reconcile then your original statement?

 

[Emjay]

Jumping your interest expense from ~$100M p/a to ~$1B p/a without a massive increase in cash flow is another sure way of wrecking a company. Happened a few companies after private equity buyouts including Edgars.

Yes - I do agree. I have said a few times Musk has paid dearly for this company. He is rash and impulsive. I see this as him trying to leverage the cult of his personality into a viable business. However, he can afford it. And even as much as some may dislike him, he does get results. And if Twitter dies, nothing of real value was lost because they are not operating anything that cannot be replicated elsewhere. Those people would just move to another already available platform. I do feel for every day people who lose money through these investments however.

I however think it's dumb for people to whine about Musk terminating employees that most likely fall into the 1%, or people arguing what these business practices are sustainable. I think what these practices talk to is the underlying issues with the stock market and taxation of companies in general.

 

[MuterOfWorlds]

Jumping your interest expense from ~$100M p/a to ~$1B p/a without a massive increase in cash flow is another sure way of wrecking a company. Happened a few companies after private equity buyouts including Edgars.

Late to the party, but lost me here?

 

[quovadis]

Yes - I do agree. I have said a few times Musk has paid dearly for this company. He is rash and impulsive. I see this as him trying to leverage the cult of his personality into a viable business. However, he can afford it. And even as much as some may dislike him, he does get results. And if Twitter dies, nothing of real value was lost because they are not operating anything that cannot be replicated elsewhere. Those people would just move to another already available platform. I do feel for every day people who lose money through these investments however.

I however think it's dumb for people to whine about Musk terminating employees that most likely fall into the 1%, or people arguing what these business practices are sustainable. I think what these practices talk to is the underlying issues with the stock market and taxation of companies in general.

Omfg. What a load of nonsense

 

[Emjay]

Omfg. What a load of nonsense

Maybe you should tell us more about how companies posting losses over 14 out of 16 years is sustainable.

Or how about starting with a definition of sustainable.

Edit:

What is nonsense is your incessant need to be right all the time makes you miss the forest for the trees. This is the reason why I just don't bother responding your BS.

 

[Emjay]

Late to the party, but lost me here?

Elon Musk’s Buyout Will Load Twitter With Debt, High Leverage Ratio

Elon Musk’s deal to take Twitter private will nearly triple the social-media company’s leverage and saddle it with hundreds of millions of dollars in interest payable on the more than $25 billion used to fund the leveraged buyout.

www.wsj.com

 

[Ponderer]

Omfg. What a load of nonsense

But you make sooooo much sense, right?

 

[quovadis]

But you make sooooo much sense, right?

Even you should be able to read that and understand how much nonsense there is.

 

[MuterOfWorlds]

Elon Musk’s Buyout Will Load Twitter With Debt, High Leverage Ratio

Elon Musk’s deal to take Twitter private will nearly triple the social-media company’s leverage and saddle it with hundreds of millions of dollars in interest payable on the more than $25 billion used to fund the leveraged buyout.

www.wsj.com

There a link for more detail on buyout agreement. Musk funding the buyout of Twitter through Twitter itself.... how'd he manage pull that one?

 

[Pegasus]

Maybe you should tell us more about how companies posting losses over 14 out of 16 years is sustainable.

Or how about starting with a definition of sustainable.

Edit:

What is nonsense is your incessant need to be right all the time makes you miss the forest for the trees. This is the reason why I just don't bother responding your BS.

That has already been done with a lovely Amazon case study which few people have taken the time to read.

 

[Ponderer]

Yes - I do agree. I have said a few times Musk has paid dearly for this company. He is rash and impulsive. I see this as him trying to leverage the cult of his personality into a viable business. However, he can afford it. And even as much as some may dislike him, he does get results. And if Twitter dies, nothing of real value was lost because they are not operating anything that cannot be replicated elsewhere. Those people would just move to another already available platform. I do feel for every day people who lose money through these investments however.

I however think it's dumb for people to whine about Musk terminating employees that most likely fall into the 1%, or people arguing what these business practices are sustainable. I think what these practices talk to is the underlying issues with the stock market and taxation of companies in general.

I also think that buying Twitter was a huge risk.
I suspect he kinda talked himself into it, tried to get out of it, but by then it was to late.

Rash and impulsive, yes.
Risk taker, yes.
Did a stupid thing, maybe.
Stupid, no.

I will most definitely not bet against him making money from this.

 

[quovadis]

Maybe you should tell us more about how companies posting losses over 14 out of 16 years is sustainable.

Perhaps looking at business's financial statements beyond the Net Profit line item would be a start.

Or how about starting with a definition of sustainable.

I'm not arguing the definition of sustainable. I'm arguing that your assertion that the the greatest determinant of sustainability is net profit is idiotic.

What is nonsense is your incessant need to be right all the time makes you miss the forest for the trees. This is the reason why I just don't bother responding your BS.

Perhaps if you would tell me where I'm wrong specifically that would help. I think I've been pretty consistent that my issue is with your "Net Profit" statement. And you're responding right now.

 

[Emjay]

That has already been done with a lovely Amazon case study which few people have taken the time to read.

Yes - I have looked at it. What do you think is going to happen when you try start up a business based on this model? Good luck finding investment. I wouldn't invest because the opportunity cost is too high.

 

[Ponderer]

Even you should be able to read that and understand how much nonsense there is.

I did read it, and it makes sense.
You on the other hand think you make sense, but it's just a lot of nonsense.

 

[Pegasus]

Yes - I have looked at it. What do you think is going to happen when you try start up a business based on this model? Good luck finding investment. I wouldn't invest because the opportunity cost is too high.

I think you have a good chance of becoming the richest man in the world. Then you'll probably started fcking around with other woman.
Then you get divorced and become the 2nd richest man in the world.

The Bezos divorce, explained

Today, being a power couple doesn’t end when your relationship does.

www.vox.com

 

[Superman-7]

Yes - I do agree. I have said a few times Musk has paid dearly for this company. He is rash and impulsive. I see this as him trying to leverage the cult of his personality into a viable business. However, he can afford it. And even as much as some may dislike him, he does get results. And if Twitter dies, nothing of real value was lost because they are not operating anything that cannot be replicated elsewhere. Those people would just move to another already available platform. I do feel for every day people who lose money through these investments however.

I however think it's dumb for people to whine about Musk terminating employees that most likely fall into the 1%, or people arguing what these business practices are sustainable. I think what these practices talk to is the underlying issues with the stock market and taxation of companies in general.

Been watching the Musk twitter thing unfold and largely share your viewpoint.

I generally agree with a lot of what he does, even though I would have done some of it differently if I were in his position. Which I'm not, and will never be, so it's hard to be completely rational about it.

I do however think he's been a bit erratic the last few days, and some of his tweets seem like the were literally sent the moment the thought materialized in his mind.

I don't however see Twitter 'going under', and a lot of the folks moving to other platforms will (probably) be back in a few weeks, if they even completely left at all. Much like the Telegram/Whatsapp thing a while back.

If nothing else, I will admit it's fun watching both the left and the right throwing their toys.

 

[Emjay]

I think you have a good chance of becoming the richest man in the world. Then you'll probably started fcking around with other woman.
Then you get divorced and become the 2nd richest man in the world.

The Bezos divorce, explained

Today, being a power couple doesn’t end when your relationship does.

www.vox.com

Then what is stopping you from doing just this?

On a serious note, most people don't have money to throw after risky investments like this. I don't think it is a sustainable way of investing because the risk is too high. For those who have the capital? Sure - I can see it paying it off big if they hit the lottery. Again, most businesses don't operate in a tech bubble.

 

[quovadis]

I did read it, and it makes sense.
You on the other hand think you make sense, but it's just a lot of nonsense.

For it to make sense it requires the actual context not just feelings. With specificity to the discussion around Twitter's viability and sustainability go have a look at Twitter's financial statements and disclosure filings with the SEC including the independent audit opinions. Either Emjay is a genius or knows better than Musk, a couple of the big 5 audit firms, at least 7 banks and a ton of private equity firms.