Musk pushes to pay off US$3bn Twitter debt

27 Jan, 2023 - 00:01 0 Views
Musk pushes to pay off US$3bn Twitter debt

eBusiness Weekly

Elon Musk is looking to line up as much as US$3 billion to pay off part of the US$13 billion loan package he used to acquire Twitter last year, according to the Wall Street Journal.

Per the Journal, the Twitter CEO was in talks with potential backers about selling US$3 billion in new shares of the company in December, people familiar with the matter said.

The new fund raise could be use to pay down the highest cost, unsecured portion of Twitter’s US$13 billion debt package.

According to the report, Musk and
his advisers were trying to raise the money at the takeover price of US$54,20 per share by the end of last year, though prospective investors weren’t
interested due to Twitter’s financial condition.

An account tweeted at Musk after the Wall Street Journal report was published on Wednesday, asking if the story was “accurate”.

In response, Musk tweeted “No.”

Fresh cash could provide some relief amid struggles to keep advertisers on the platform. Musk previously said bankruptcy was a possibility during an all-hands meeting in November.

Twitter also suffered a “massive drop in revenue” that followed an exodus of advertisers.

The Journal reported at the end of last year that attempts to hold onto advertisers put off by Musk’s revamp of the site were not going well.

The report said that about 70 percent of the biggest spenders before Musk’s takeover were no longer spending ad money on the site as of the week ending December 18.

Advertising accounted for about 90 percent of Twitter’s revenue in 2021.

“I now think that Twitter will, in fact, be OK next year,” the billionaire CEO said after implementing a range of cost cutting measure, which included a round of widespread layoffs in December. — Wall Street Journal

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