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Outspoken billionaire Elon Musk claims to have saved Twitter from bankruptcy and looks to transform the company’s fortunes.
Elon Musk claims that his $44 billion acquisition of Twitter last October saved the social media giant from bankruptcy. According to the brash Tesla CEO, his purchase of the popular microblogging platform proved timely and prevented Twitter from slipping into insolvency.
Musk replied to a tweet from The Wall Street Journal, and highlighted his recent operational obligations, saying:
“Last 3 months were extremely tough, as I had to save Twitter from bankruptcy while fulfilling essential Tesla & SpaceX duties. I wouldn’t wish that pain on anyone. Twitter still has challenges but is now trending to break even if we keep at it. Public support is much appreciated!”
However, it remains unclear if the controversial billionaire’s Twitter comments are self-gratifying or a legitimate fact. Nonetheless, Musk might have reason to feel vigorously empowered by a different cause. A jury in California recently found the Tesla CEO “not liable” for losses that the EV firm’s shareholders suffered following his announced plans to take Tesla (NASDAQ: TSLA) private.
When Musk said he was taking Tesla private, the outspoken CEO said he was mulling a share price offer of $420 a pop. He also claimed to have funding secured. However, in reality, there was no available funding. Musk’s claims which went public in 2018, initially sent Tesla’s stock soaring 11% to $387.46. However, TSLA eventually crashed to $263.24 a month later when it became apparent that funding was not secured.
Musk Seeks to Maximize Twitter Profitability at All Costs, Once Considered Bankruptcy as Option
Since taking over Twitter in the fourth quarter of last year, Musk has aggressively pursued a profit maximization policy. On several occasions, the billionaire businessman made no secret of his intent to introduce varying charges and fees for numerous Twitter services. Such payment schemes include charging users for account verification status and charging developers for API access.
However, pursuing and implementing these plans has yet to go smoothly for Musk. In addition to receiving polarizing reactions to his proposed policies, the billionaire reportedly floated bankruptcy as a possibility for Twitter.
Despite the Twitter bankruptcy talks, Musk recently revealed that the social media giant is “trending to break even.” In addition, the company recently made the first interest payment on the $12.5 billion debt he borrowed to complete the acquisition.
At the end of Q4 last year, Twitter lost $270 million in revenue amid declining ad sales. In January 2023, The Information reported that Twitter ad sales were down 40% compared to the year-ago period. Furthermore, reports also stated that 500 of the social media giant’s top advertisers had paused spending since Musk’s acquisition.
Musk’s other company Tesla, arguably the flagship asset in his portfolio, has suffered a massive decline in value over the past year. The EV manufacturer slid 37%, leading to an enormous dent in the billionaire’s personal wealth. Last year, Musk became the first person in history to lose $200 billion in a single year.