Twitter CEO Elon Musk has provided some convincing commentary about his willingness to forgo revenue in order to retain “free speech.” However, more recently he has qualified that outlook by saying, “Freedom of speech is not the same as freedom of reach.”  Musk noting Twitter will block, remove, censor, shadow ban, deboost, downrank and stop content from amplifying based on the determination of those in charge of Twitter content.

This controlled “freedom of reach” perspective, which is really shadow-banning in practice, is generally accepted and now admitted.  Against this backdrop, it becomes important to understand the priorities of the platform to understand the guidelines of the platform.  Within this context the financials are key to understanding what elements are included within “approved content.” {GO DEEP}

Twitter is now a private company, therefore understanding the financials of Twitter is a little more challenging than when they were required to post their financial statements publicly.  However, Elon Musk gave an interview with the Babylon Bee yesterday and revealed some of the internal financial challenges. [VIDEO HERE]  I am going to summarize the status of the Twitter financial position according to what Musk himself revealed.

♦ Twitter was initially purchased by Musk and his investors for around $44 billion.  The company now estimates its value around $20 billion.  Musk overpaid.

♦ Musk put roughly $30 billions of his own net worth into the purchase and financed the rest.

♦ Current outstanding debt on the financing for the purchase is around $12.5 billion. Per Musk statement.

♦ Current debt service, interest on the loans (from investors), is roughly $1.5 billion/yr.  $120.5 million per month for debt service.  Per Musk statement.

♦ Previous revenue (when public) was roughly $4 billion/yr.  Twitter was generally breaking even.

♦ Advertising revenue, as a result of changes in industry in combination with concerns about Twitter, are “half” what they were during the acquisition phase, per Musk statement.  That puts current advertising revenue around $2 billion/yr.

Per conversation, current status of Twitter is -$3 billion/yr and could be as high as -$4 to 5 billion/yr.  This makes complete sense if $4 billion in revenue was generally the breakeven point (before acquisition), and now they have $2 billion in revenue and $1.5 billion in additional debt service [as they trim operational costs (including labor) to offset].

♦♦ For the bottom line to be an operational loss of $3 to $5 billion (est) per year, Twitter is generally losing around $300 million per month.

♦ There is only so much Tesla stock Musk can sell to support Twitter.  He has limits. Per conversation.

♦ Twitter has around $100 million/mo in liquid cash available. Per conversation.

Twitter is in locked contracts with AWS and Google cloud services through 2025 at roughly $300 million per year for both [AWS $100 million, Goog $200 million].

There’s your prism for platform content!

Elon Musk needs revenue desperately.

Twitter urgently needs advertising revenue.

Without revenue or acquisition of another platform (with assets) to offset the current status of Twitter, it is only a matter of time before bankruptcy.   [Note, Twitter investors are backstopped with Tesla/SpaceX as collateral against default.]

The tightrope… Elon Musk must appease the Google advertising control agents and adhere to content rules and regulation (DEI etc.) in order to maximize his revenue.  That’s where Linda Yaccarino comes in as a critical player.

Bottom line, Musk has to make decisions through one prism, THE ECONOMICS.  Musk’s decision-making, pro freedom or not, is constrained by this financial dependency. Hence, a lot of the platform censorship elements remain (including some personnel) and now the outreach to appoint Google/WEF approved Linda Yaccarino in an effort to enhance the revenue.

When you are perplexed about Musk decision making….  THERE’S YOUR ANSWER.

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