World News , Since going public in 2013, Twitter has only won occasionally, despite being a global leader in politics and culture.
The company made an announcement on Monday that Tesla CEO Elon Musk had struck a deal to buy it’s outright, which have raised questions about whether it would lead to a brighter financial future for Twitter.
Musk downplayed economic considerations as a motivation for his purchase, saying at the TED2022 conference earlier this month that “this is not the way to make money.”
Musk continued, “It’s just my strong and intuitive feeling that having a highly trustworthy and inclusive public platform is critical to the future of civilization.
A Timeline Of Elon Musk’s Takeover Of Twitter – World News
Listed on the New York Stock Exchange for nearly nine years, Twitter has reported net losses every year except in 2018 and 2019, when it posted profits of more than $1 billion.
Musk paid more than $44 billion to the company, an amount below Facebook’s estimate of more than $500 billion.
Twitter’s revenue comes primarily from advertising, not from a user base that isn’t large enough to balance its finances.
Late last year, it announced 217 million so-called “monetized” users who were exposed to ads on the platform. That’s a far cry from Facebook’s 1.93 billion subscribers.
Twitter is expected to release on Thursday Wall Street expects earnings per share of three cents and sales of $1.2 billion.
– Profitability is not a priority –
While Twitter’s business prospects are no big deal, the world’s richest people will at least try not to lose money, especially since some of the acquisitions may be self-funded. Insecurities documents released last week, Musk has $13 billion in debt. Mr Musk has not said how he intends to increase Twitter’s revenue.
However, in a tweet, he suggested lowering the price of Twitter Blue, the network’s paid version, which costs $2.99 per month, providing paying customers with certified accounts, and removing ads for those subscribers. He then retracted the message.
Another option in Musk’s hands is downsizing, potentially reflecting his desire to make it easier to moderate content on the platform.
Musk could also try to accelerate user growth to generate ad revenue or add new paid features to the platform.
“He has his own plans. If he can maintain the subscription model with the free option, it can work,” said Angelino Zino, a CFRA analyst.
Funding most of the takeover with bank loans would mean Musk increasing Twitter’s debt burden, and on Monday S&P Global Ratings warned against downgrading Twitter’s BB+ rating.
Zino noted that Musk might consider partnering with other investors to avoid using his own wealth.
“If he attracts other big minds from the judiciary side, he may have more success,” he said