this post was submitted on 06 Oct 2024
411 points (97.9% liked)
Technology
58507 readers
4360 users here now
This is a most excellent place for technology news and articles.
Our Rules
- Follow the lemmy.world rules.
- Only tech related content.
- Be excellent to each another!
- Mod approved content bots can post up to 10 articles per day.
- Threads asking for personal tech support may be deleted.
- Politics threads may be removed.
- No memes allowed as posts, OK to post as comments.
- Only approved bots from the list below, to ask if your bot can be added please contact us.
- Check for duplicates before posting, duplicates may be removed
Approved Bots
founded 1 year ago
MODERATORS
you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
This is mostly incorrect.
First he's not overleveraged from buying Twitter. He bought it with Russian, Saudi, and 400 other investor's money. There was aist recently published.
Second, he doesn't need to put any personal money to pay Twitter's fines, Twitter has its own money/debts and accounting.
Third, even if it was his own money, he would sell stock, he could borrow against it, avoiding selling it.
Fourth, even if all of the above was true (which it isn't) for a hundred-billionaire, losing tens of millions doesn't register. It's like someone with a couple million bucks in the bank losing a few hundred. It's like a nice dinner.
Point four I've already answered; the need to liquidate stock amplifies any costs, with a potential to create a catastrophic snowball that could lead to a significant collapse in his fortune (nothing could ever make Musk "poor" by any sane standard, but he could become significantly poorer, which I'm sure to him would be the end of the world).
Point three is answered by him being overleveraged. He took on a lot of debt to buy Twitter, which makes taking on additional debt significantly harder. You've both tried to dispute this, while simultaneously confirming it. We'll get to that with point one.
Point two is misleading. While Twitter does have its own accounts, those coffers are bare. Either Musk foots the bill out of his own pocket, or the company goes bankrupt. Either way, he's still on the hook for about $800,000,000 a year in interest payments on the debt it took to buy it.
Which brings us to point one; you've tried to dispute this point by offering the evidence that confirms it. As your correctly state, Musk went into business with a murderers row of the kind of merciless loan sharks that you only do business with if the banks all laughed at you. As I mentioned previously the interest on the debts he took on to buy Twitter is $800 million a year. You don't accept those kinds of financing terms if you have better options. The fact that he did is all the proof you need that his credit is shit. The banks know damn well how precarious his wealth is. And if further evidence was needed, consider this; why did he trigger a significant collapse in Tesla's stock price last year selling off stock to service those debts if he had the option of simply borrowing against his assets as you claim?
Twitter is it's own entity. Musk is not in debt, Twitter is. And if their coffers are empty they can take more debt, in Twitter's name. I'm sure a Saudi bank would oblige as long as it's useful. However Twitter could go bankrupt and Musk would just lose his initial investment, which was a couple of billions max. Saudis, Russians and the Peter Thiels of the world would lose their investments as well, which I'm sure they would see as a small price to pay to kill a platform so inconvenient for them as Twitter was.
Tesla? Last year all tech stocks took a dive. Tesla's price is based on unicorns and rainbows, so it tracks the tech bubble more than real companies like Ford. Same like OpenAI and others.
Then WHY fight something that would've been pennies and now will at least be dimes? As much as I want to believe musk is close to insolvency, I don't think its quite possible yet. But then why die on these stupid little hills?