I wasn’t going to write about this, but so many requests and contacts have come in, and considering that my background conversations with people are leading to actionable positioning, that I feel it is only fair to share publicly what I am analyzing privately.
The predicate for all assumptions is several fold: {Go Deep One} and {Go Deep Two}. Most of the financial groundwork for analysis already exists. In summary, Elon paid $44 billion for the platform. Current valuations are around $15 billion. Current debt service is $1.5 billion/yr (roughly $100m/mo). Current expenses include $100m/yr AWS, $100m/yr Goog cloud (both contracts), +payroll and misc.
Approximately 9 months ago, Musk had $1 billion in cash reserve for Twitter. The burn rate deficit was roughly $100m/month. That put timeline estimates for an inflection point on/around October 2023. It is now October 2023.
Approximately a week ago, Twitter CEO Linda Yaccarino made a bold statement. Yaccarino stated that from her review of the current status, Twitter would start to turn a profit in the first quarter of 2024 {link}. However, with $100 million per month in debt service alone, this statement seemed too far of a stretch. At pre-musk levels of revenue, maybe; but that $1.5 billion debt service is a heavy nut to carry.
Timing – Remember, it’s October. Last Friday, the Securities and Exchange Commission (SEC) gave special regulatory approval to Bill Ackman’s firm, Pershing Square (hedge fund), for a new investment vessel called SPARC, whose purpose is to invest in private companies in order to take them public. As noted by CNBC, “In a SPARC, investors will know what company the financing vehicle would be used to merge with before they have to pledge their investments.” The financial mechanism avoids some of the issues with typical IPO’s.
•It’s October, inflection time. •Yaccarino says a strategy is underway for profitability in Q1 2024. •Ackman gets SPARC approval, and then suddenly:
[…] “The answer is I have a lot of respect for Musk. I think Twitter is a really important platform,” Ackman told CNBC. “I think he’s made tremendous improvements to the platform, and I think it’s a unique, very difficult-to-disrupt, kind of asset and one that could grow.”
[…] Though Musk hasn’t expressed any interest in working with Ackman to take X public, and despite the $13 billion in debt tacked to the company, Ackman has worked out a loose plan to make it happen, if Musk were interested.
“What’s interesting here is we could commit $2 billion to a transaction, set the rights price to $121 million, set it at $100 a share and announce a transaction,” he said.
“And then we tell the story and then the rights holders have a chance to decide whether to invest. As long as the rights have positive value, they’re all going to get exercised, and the IPO raises $13 billion.” (read more)
The heavy nut disappears.
Investors roll the debt into discounted shares of stock. If Ackman can generate a $17-$20 billion outcome for Twitter, Musk nets $5b and retains 20-25% of shares. Yaccarino gets well compensated. It’s a win/win/win.
Critics would say the IPO would mean Musk compromising on the free speech commitment. However, in reality Musk has already reinstalled many of the control mechanisms of the previous “safety council,” along with the “freedom of speech, not freedom of reach” outlook. Musk and Yaccarino have also partnered with the Global Disinformation Index.
The compromises are already baked into the platform, and seemingly have been since Yaccarino became CEO. The 2024 election is next year, and influence is a lucrative business.
The love of money is the root of every kind of evil.
what about just liking it a whole bunch ??
As long as the Big Guy gets his 10 percent.
SD is the big guy now ?? 🙂
Amen.
Hope your Big Guy is my Big Guy; do you look up to him?
He’s the only Big Guy that really matters!
No. Jesus is.
If you have to ask, your already hooked.
I have had literally oodles of admittedly ill gotten gains, piles of bundles of $100 bills,…and I have been on the run, literally penniless, homeless and drinking water from a puddle at the side of the road, from a recent rain.
I was actually happier, in the latter situation, than the former…there is a certain comfort, and surety in knowing you really have nothing to lose, and an inherent insecurity in knowing all that you have aquired, could be taken from you…
there’s a not a damn thing wrong with working your ass off, following the rules and being richly rewarded
not one GD thing
yeah right. Give up your whole life is the only salvation.
Freedom is just another word for nothing left to lose
Nothin’ ain’t worth nothin’ but it’s free
I don’t know why freedom smiles on some and lets the rest go free.
Same difference, as we yinzers say.
I may like money but it doesn’t mean I have any.
I started with nothing, and have most of it left.
Same here only took 40 years at 60+ hours per week. Saved when it hurt and got lucky in the stock market.
Gershwin:
Oh, I got plenty o’ nuttin’
An’ nuttin’s plenty fo’ me
disagree. never take a bite of the apple. it’ll kill yah!
I love the money I earn with every bit of my heart; it is freedom from want, it is happiness of self sufficiency, it is mental stability in times of turmoil, it supports me and others, it fits the basic need of human comfort, it supports worthy causes, and it makes me happy both making the money and spending it (sometimes even frivolously)……..
I do a jig with each paycheck and with each deposit into savings; and I also get furious with the withholdings for many frivolous government spendings. Taxation has become robbery; I see why the Robber Barons were hated.
Elon does toil for his money, and like everyone else his money takes a hit with every penny he makes or loses; free enterprise is no more free than your earnings are from the Robbers. There really is no such thing as free lunch; your pockets are picked to pay for it. And yet he has a sense of adventure, the future, and mostly a sense of humor.. He and Trump are taxed everyday with the thought of losing everything they have especially their self worth.
Nothing better than to see the rich fall? Riches, like corruption, it’s to be expected with certain segments of societies; but whether they are totally against anything that harms children is my bellwether, not their bank balance.
Do you actually approve of Musk taking Twitter public?
Great summary Sundance 👌👍
Corporate top heavy Fascism is still on the train 🚆 tracks destroying our Constitutional Republic 😈
What would the burn rate have been if Musk hadn’t taken a meat cleaver to the bloated Twitter staff? And WHO was paying for THAT burn rate?
Musk cut roughly $500/yr million in bloated expenses. Then, together with Yaccarino, slowly has started adding back on.
Good question and even better answer.
Yes, but did the previous owner have the same cost to acquire? That is the difference.
Then maybe it’s Yaccarino who needs to go.
Seems like a likely scenario. The market is currently is in a deep dive (as of PM 10/3). There’s a lot of play in the stock market with going “short” or “long” so who knows. We’re all Bozos on this Bus.
This one’s for Humphrey:
‘The future’s comin’, and there’s no place to hide!’
-Artie Choke
“Arti Chokes three for a dollar at Hughes”
*that was the punchline to a joke back in the 1980’s – I thought it was funny at the time because I was very cognizant of store prices in all the local markets, was a coupon clipper and saved SO much money at the register, using double and triple coupons (Hughes offered triple coupons) – it even helped me to overcome some of my inhibitions, having to go through the coupon routine and people in the line WATCHING, impatiently – but then they would see the total shopping bill drop fantastically and that was my reward for not buckling under their glares. I DID try to choose less busy times at the stores.
Jack’s Magic Coffee Shop – grand reopening coming soon!
Two sugars, hold the freedom.
“If a tree falls in the woods but no one is around to hear it, does it make a sound?”
Well, if a post is made on the internet but it is blocked from posting by AI, is it a posted thought or comment?”
No – they have eliminated the ears of ANYONE to hear! THAT is their plan…
The Al Gore Rhythms started at Google, right?
Perfect! Where did you find this?
Who TF Cares? To begin with, begin with, never has there existed such a prolific “forum” for those with very little to absolutely nothing worthy to say. I’ve never been a subscriber to it nor Facecock, but have you also noticed that as bankrupt as 95% of journalism is most of them abdicate what passes for it in a link to twatter aka “X”? They can damn burn for all I care.
I understand your sentiments. However, sundance has always pointed out the federal government was behind twitter because they were the only ones who had computers big enough to make it work. Then they used it as a platform of disinformation and propaganda. So the point is it isn’t about what you like and dislike, it’s about the entire scheme. And the ptb are soon going to be back in charge. At least that’s the way I see it.
Huh?
And, more importantly, as my IT wife pointed out when Social media began, data mining all your personal info.
Whether you like it or not really isn’t the point. What matters is that this is an attack on free speech, which was guaranteed to all citizens, not just those we like and agree with.
Worked for a company that went public and then quickly changed CEOs so that they could sell. If this happens, we might find that this was Yackety Yak Don’t Talk Back’s goal all along.
Would be nice, but…
Sounds like they are offering Elon Musk “a way out” because if anyone thinks Musk will have anything to do with X (including the name) after it goes public? I’d say they were nuts. Even if he retained majority share, he’d probably end up with a Project Veritas situation. Not hard to imagine.
It seems apparent to me Musk has been dueling with other interests in order to make X profitable. His clear and obvious concession in making this lefty CEO wasn’t enough for the left to start going after X’s advertisers.
Maybe the new paradigm re online advertising is not as fruitful as it used to be. Seems with the lies regarding how the economy isn’t as awful as it actually is, who’s buying what products?If it’s not a necessary part of one’s daily existence, who’s buying bs they don’t absolutely have to.
Don’t forget, Musk tried to back out but they forced him.
Then they orchestrated a boycott of advertisers.
Bet Musk hired Yakity Yak to make it sellable.
He should have paid the fine for backing out – He would have been ahead financially.
I dont know much about investing but, it seems like buying stock in truth social would be a good idea. When x goes commie, it will about the only non censor platform left. I think they just got a year extension for a merger.
I hope TruthSocial doesn’t have a bad underlying architecture.
Sundance never did a smarter thing than getting away from one. Though I know the transition had its bumpy moments, it worked out so well!
Bill Ackman. 🤢🤮🤢🤮
Go read Eccl. 10.19.
You can wine me, and
You can dine me,
But Da Money Talks
&( etc. ).
Nuts.
One letter expletive Mr Starlink Baphomet.
It does make sense …
so, that’s why he is insisting that “X is better than the legacy media”.
While some legacy media has a paywall, HeX has a spy wall.
You can’t see jack unless you sign up, and even those that do have very limited ability to share it.
They’ve made noises about their goal of an everything app and forcing people to be ever more open with their data and identity, to include photo ID and apparently biometrics at some point.
They block views and throttle contributors, so as a citizen journalist platform he’s taking it farther away from being citizen media it seems.
…with a little nod to Stan Lee.
He wants us to believe that what we see on X didn’t have to be approved by whoever is approving legacy medias as well.
😏
Good point!
Name the new IPO “XXX”, add a porn site division, use it to bait the federales who will watch it all day, then start taking names.
So what if Musk is losing money with each twitter user.
Can’t he make it up on volume?
Problem…
X user = lose money
Path to prosperity…
Add more X users
🤔
Heh.
wonder why Musk doesn’t create his own AWS?
Wonder where this will all end up for him when it’s more or less settled, the losses written off his taxes, etc.
If Ackman can generate a $17-$20 billion outcome for Twitter, Musk nets $5b and retains 20-25% of shares.
Seems he’ll scrape by.
Was this also baked in Tucker’s decision to partner with X?
“A republic, if you can keep it.” Benjamin Franklin
Well we couldn’t expect our republic to survive an expansionist empire stage – they never have and never will.
I respectfully disagree with going public. If Musk were to do that, he’d be subject to SEC harassment. If Musk needs money, he’ll dig it up from somewhere until he is able to build out the future PayPal like payment system.
The SEC will leave Musk alone as long as he plays nice with the other boys and girls in the Big Club.
Just stop using it.
DS/IC seed money, global elite investment in “SPARC” IPO.
Will float the financial end at least long enough to snooker users, retail investors and general public to us; and be used against them with ‘shadow banning’ censorship & psyop operators to influence and provide their own dis/mis/MAL information.
Here it comes!
I wonder who Bill Ackman and/or senior executives are affiliated or have relationships with? 🤔👁️
William “Bill” Ackman is a Democratic political donor, investor, and hedge fund manager. Ackman has shorted stocks betting they would fall in value while
Why are housing prices rising?
While I understand that people are not selling/moving due to interest rates, and that decreased supply causes increased prices.
But people have to sell due to death or jobs or inability to pay their mortgage. So why would prices continue to rise?
The value of the dollar is falling and prices of real things are somewhat stable. Houses are real.
Also, we have millions of people invading who need housing.
Are we sure Elon wants twitter to survive? If it doesn’t, who benefits.
Everyone has their price.
From a consumer (“X”user) point of view, I’m not sure it matters. The content will be censored regardless. I think they ‘unsuspended’ many Trump followers so they could better track their messages and hide their content, letting them still think they have a voice, outside of their own echo chamber.
I was (proudly) suspended 1/6/2021, the same day as the greatest Tweeter of all time! I finally got back on in May of this year, only to be suspended again this past Sunday.. NO prior warnings, NO explanation why, appeal already denied. I’m not sure I’ll try again. Regardless, I will continue to capture the most important posts from Sundance and others and share across other platforms, the best I can.
Cool report.
So the whole thing was just a rebrand. Then they are ready to do more or less the same thing in 2024, albeit not as obviously.
It would be funny if a CIA front company purchased the majority of the shares and then were outed. They want control so badly it would get rid of any and all roadblocks.
That squirrel’s going places!
Didn’t Yaccarino say her projections were based on the recent return of 90% of big advertisers, not because of a possible SPARC? 1,200 advertisers in the last few weeks, if I remember correctly. If that last 10% see X is thriving, and the ADL has suddenly lost its rabid bite, stands to reason they return to X and the financials gap is closed.
Anyway, in case nobody else has noticed, since X is stuck with AWS and Google, Musk has decided to melt their servers by introducing live- and gaming-streaming. Those two added features create more user interaction, which creates more ads impressions, which creates more revenue. Outside-the-box thinking. It’s what he’s done with all his companies.
Going public is always the end game. That is where the real money is made.
Influence is a lucrative business. Yes it is. Just ask the Biden crime cartel. Influence is all they have to sell and they have sold many millions of $$ of it.
Not only the election is next year but the Olympic Games. Massive advertising revenue is in the offing
Musk got what he wanted from Twitter (the data to train his Artificial Intelligence engines). He is now going to cut his up front losses and leave X (Twitter) to the internet influencers to debate censorship. He stripped the company of its most valuable resources, and now he does not care. In a year he will no longer hold any control over the company.
Musk spending $44B and ending up with only $5B does make me feel better about my life choices.
I knew it was too good to last.
Good luck making money on a platform that is still suspending accounts for no reason. Who is going to pay a monthly, or worse yet an annual fee for something you can take away for no reason what so ever?
Just in case anyone is still here:
Musk envisioned Twitter becoming an “everything”platform he had been thinking about at least since PayPal days. IIRC, he had always had the name “X” in mind for such a thing — thus the change.
OTOH:
Read a recent musing of Musk (within past month) that he COULD probably make Twitter massively successful, but he didn’t really have time because he was basically trying to save humanity from AI. He also said it wasn’t like he really needed to be richer.
Take these data points as you will.
Chipmunks gotta chip . . . or munk? They look like they are ready to do something!
Elon Musk.
Liar. Fraud.
Always has been, always will be.
Wouldn’t Musk need to resolve his war with the SEC? Or is this pressure to drive him into that corral?
SEC sues Elon Musk over CEO’s refusal to testify in Twitter investigationEvan Rosen, New York Daily News
Thu, October 5, 2023
“Musk’s ongoing refusal to comply with the SEC’s administrative subpoena is hindering and delaying the SEC staff’s investigation to determine whether violations of the federal securities laws have occurred,” attorneys stated in the complaint. “Accordingly, the SEC now asks the Court to compel Musk to appear for investigative testimony.”
https://finance.yahoo.com/news/sec-sues-elon-musk-over-003500176.html