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Elon Musk says he’ll reduce Twitter workers to profit from tweets



Elon Musk says he'll reduce Twitter workers to profit from tweets

Elon Musk promised banks that agreed to assist him in financing his $44 billion acquisition of Twitter Inc. According to three people familiar with the situation, he would decrease executive and board compensation at the social media business to minimize expenses and create new ways to monetize tweets.

The sources said that musk made the pitch to the lenders as he tried to get money for the buyout. He made the offer to Twitter on April 14, and he was trying to get cash for the buyout soon after. To get Twitter to accept his “best and final” offer, his bank commitments on April 21 were a big part of the deal.

Musk had to show the banks that Twitter was making enough money to pay off the debt he wanted to get the money he wanted. He earned $13 billion in loans based on Twitter and a $12.5 billion loan based on his Tesla Inc stock, which he used to get loans. He agreed to pay for the rest of the payment with his own money.

Sources say that Musk’s pitch to the banks was more like a vision than a promise, and they don’t know how many cost cuts he will make when he owns Twitter. The sources said that the plan he gave to the banks was very vague.

It’s possible to cut the salaries of Twitter’s board directors, which could save about $3 million in costs, said Musk in tweets. During the 12 months ending on December 31, 2021, Twitter paid $630 million in stock-based compensation, a 33% increase from 2020.

Musk also talked about Twitter’s gross margin, which is much lower than companies like Meta Platforms Inc.’s Facebook and Pinterest. He said this gives him a lot of room to run the company more cheaply, so he wants to buy the company.

Because this is a private matter, the sources asked for anonymity. A representative for Musk did not want to comment.

Bloomberg News said that Musk told the banks that he would cut jobs as part of his pitch. One of the sources said that when Musk takes over the company later this year, he won’t be able to decide about job cuts.

He bought the company even though he didn’t know how well the company was doing financially or how many people worked there.

Also, Musk told the banks that he wants to develop new ways to make money from tweets that are important or get a lot of attention, sources say.

Among the ideas he came up with was charging third-party websites to quote or embed tweets from people or groups already verified by them.

In a tweet earlier this month that he later deleted, Musk suggested several changes to the social media company’s Twitter Blue premium subscription service, including slashing its price, banning advertising, and giving users the option to pay with the cryptocurrency dogecoin. He also said that the service should be free of ads. Twitter’s Blue service now costs $2.99 a month, which is about the same as before.

It’s not clear why the tweet was deleted, but Musk said in it that he wants Twitter to make less money from advertising.

A source told CNN that Tesla CEO Elon Musk has said he will help banks sell the syndicated debt to investors and that he may give more details about his business plan for Twitter then. Forbes estimates musk’s net worth to be $246 billion.

Musk has also lined up a new CEO for Twitter, one of the sources said, but didn’t say who that person was. He told Twitter’s chairman, Bret Taylor, this month that he doesn’t have faith in the management of the San Francisco-based company. It is likely that Parag Agrawal, who was named Twitter’s CEO in November, will stay in that job until the sale of the company to Elon Musk is made.


He’s been getting a lot of offers from people who might want to be part of the deal with him on Twitter. He’ll decide in the next few weeks whether to work with someone. This means that private equity firms aren’t likely to work with Musk because the deal isn’t set up in the same way as a traditional leveraged buyout, a source says.

On Thursday, Musk said he sold $4 billion worth of Tesla shares, likely to help pay for his deal with Twitter.

The CEO of Tesla also told the banks that he wanted to make the social media platform as accessible as possible within each country’s legal boundaries where Twitter operates. This is a position that he has said publicly.

The $13 billion Twitter loan is worth seven times the company’s projected earnings before interest, taxes, depreciation, and amortization in 2022, so it’s a lot of money. Many banks didn’t want to take on this risk, sources said. They only took part in the margin loan.

Because some banks feared that Musk’s unpredictability could drive away talented people from Twitter, which could hurt its business, the sources said.

Twitter didn’t answer a question about what they were going to do.