Elon almost certainly has enough money to keep funding Twitter until he gets bored with it and moves onto something else; which, granted, might not even take a year. It's hard to say what happense at that point but my guess is that he sells it for a fraction of the purchase price. Twitter has a big enough network that there will be something left in the wreckage that someone can try to rebuild from.
Bankruptcy could still happen of course, even if Elon still has the money. He might think that completely shutting down Twitter is less embarrasing than selling it for a 90% loss, Elon is still pretending to be a business genius after all.
> Bankruptcy could still happen of course, even if Elon still has the money. He might think that completely shutting down Twitter is less embarrasing than selling it for a 90% loss, Elon is still pretending to be a business genius after all.
We do not know the reality. He has cut the payroll significantly (despite the severance since that is a 1 time burden), he has added paying customers with Blue, and by killing the API, he increases those paying customers. He can also browbeat or schmooze some large customers like Apple to advertise more. It may not be enough but a smaller profitable or cash flow positive twitter could still run for a while before he feels the pinch.
Not sure if he can make the billion dollar interest payments, but imagine if twitter can make 800M, and his Tesla stock goes up double, he would not feel a pinch bridging the remaining 200M although he may try to get someone else (or the company) to pay for it.
At over a billion a year in interest payments to just service the debt is going to be hard. Twitter, before Elon, was already losing a couple hundred million a year. It has to be worse now.
I do agree that Morgan Stanley and the other financiers are going to be the kids without a chair when the music stops.
> Twitter, before Elon, was already losing a couple hundred million a year
Twitter's business was making a profit in 2018 and 2019, but then 2020 happened (because 2020), and in 2021 they had a $800 million class action settlement to pay (without that it would have been $600m profit), and then in 2022 Elon tanked the company in the 4th quarter.
The core business was (just about) profitable before Elon. It was just far below the FAANG-level expectations from a tech company.
Elon had backers for the twitter purchase, they're going to be left holding the bag. They're probably desperately hoping he'll leave and install a permanent CEO as promised ASAP
40B acquisition to bankruptcy sounds brutal. I'm sure there's some nuanced financial way they can recover and continue but wow.