Musk: "Twitter Is Not at Immediate Risk of Bankruptcy"... Tesla Stock Plummets 70%

"Storms for a Year and a Half... No Stock-Backed Loans Allowed"

[Image source=Yonhap News]

[Asia Economy Reporter Haeyoung Kwon] Elon Musk said that Twitter is not immediately facing the risk of bankruptcy but is still not safe.

According to Business Insider on the 25th (local time), Musk stated on the All-In podcast broadcast on the 24th, "Twitter's costs are being fairly controlled."

He said, "Twitter is not on the path to bankruptcy, but it is not safe yet," adding, "There is still a lot to be done." At the same time, he expressed satisfaction regarding Twitter's latest features, saying, "Overall, it seems to be heading in a good direction."

After acquiring Twitter for $44 billion last October, Musk mentioned the possibility of 'bankruptcy' to employees, citing the company's difficult financial situation. He warned, "The upcoming economic conditions will be especially terrible for companies like ours that rely on the advertising market," and that Twitter could incur losses amounting to billions of dollars next year.

Twitter, which was already in poor financial condition before Musk's acquisition, has seen its management situation worsen further after the takeover. Twitter's debt ballooned from $5.29 billion to $18.5 billion after Musk's acquisition. The interest burden alone is $1.2 billion annually. Since 90% of Twitter's revenue comes from advertising, advertisers have left following Musk's acquisition, and the company has taken on debt after the acquisition.

As Musk focuses on managing Twitter, Tesla's stock price has been falling continuously. Tesla's stock price dropped about 70% after reaching an all-time high last November and has slid 65% so far this year.

Meanwhile, Musk recently warned against 'debt investing' in relation to the stock market situation.

On the All-In podcast broadcast on the 24th, he said, "You should not take out stock-backed loans in a highly volatile stock market," adding, "You need to prepare for contingencies from a cash perspective." He further added, "Extremely drastic events can occur in a bear market."

Musk mentioned, "After the storm passes in one to one and a half years, dawn will come in the second quarter of 2024," and said, "Just as booms do not last forever, recessions do not last forever either."

This content was produced with the assistance of AI translation services.