Could X go bankrupt under Elon Musk?
Could X go bankrupt under Elon Musk?
Musk's profane attack on advertisers baffled experts - without adverts, how would X survive?
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Asking if X will go bankrupt is not the right question. Elon has many untapped reserves of cash that he could use at any time to continue to pay the bills.
The guy just needs to speculate publicly on a cool sounding idea and a billion dollars in cash will fall out of a tree somewhere. That is his level of social status.
Bankruptcy happens when a company is imminently falling apart because there is no cash and a creditor repossessing things may disrupt other higher priority creditors. Therefore a judge needs to add order to the process which puts a legal hold on a lot of things. Unless Elon has some dramatic personal meltdown way beyond what we've already seen, that's really unlikely.
The real question is... How does Elon plan on making a profit from this thing if he's insulting those who are paying his bills today? He did float the idea of creating a super app that might handle payments and many other features. That has the potential to be a massive profit center if executed with precision. Perhaps the Twitter user base can be converted... Which would mean advertisers are no longer needed.
I would not be surprised if such a thing is in the works and would be announced when it's almost ready to launch.
"Just wait everyone, Elon is actually being smart this whole time" I just don't buy it.
He can pay for it, but would you dump money into a burning pit over and over and over again, after you already dropped around 1/8th of your total worth into a failure? Especially when you only bought it because you were forced to by law? Musk has been directly asked if he would subsidize it more with his personal fortune recently, and in response he whined about who would be at blame for it going bankrupt. I dont think hes going to put anymore of his money into it.
Even in Twitter's fully profitable years where it made 1.5bil pre buyout, that still would barely service its new yearly debt. That was before he lost 13% of the userbase and 50% of the total advertising, including nearly all of the large advertisers.
His current replacement for losing all those advertisers and 100s of million of dollars? Paid twitter blue, which apprently is about 300k out of 400mil users, or less than 0.1% of total users. As you can imagine, their 30mil/year is not going to make up to the 100s of millions/yr shortfall his behavior has caused.
His "lets be wechat" idea is also ludicrous. He has said that he thinks X can take over 50% of all banking in the world, which by the numbers is all of US, Europe and China combined. This means not only taking over an area that already has native apps that are entrenched and making billions, but also convincing all Europeans and Americans to abandon banks and put their money into an technically unstable platform run by a loud and proud antisemite/racist. This ignores that Americans and Europeans already have "use an app for banking" like google pay and apple pay, but apprently vastly prefer using cc/debit by a ratio of 90%. The apps are already on all our phones, and most no one uses them.
So yeah, his "hail mary" is to eliminate huge, entrenched and dynamic state supported rivals in China, and to change all of the 100s of billion dollar banking landscape in the US/Europe where no one wants an app to do this, all with zero inhouse expertise and a CEO whose technical background is Ad sales.
I have my doubts.