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this post was submitted on 20 Nov 2023
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I won't believe this thing can ever die until I see it rotting in the ground.
$13 Billion debt means $1.3 Billion/year interest payments.
I'm pretty sure Elon can pay that btw. But I'll be watching from the sidelines for that shitshow.
Do you really think a company like that would be paying 10% interest?
My 10% estimate is assuming April 2022 (edit) market, when the deal was signed.
It could be as high as 15% depending on circumstances. But yeah, consider the 10% number an underestimate.
Rumor is that half the debt was variable and half the debt was fixed. Suggesting about 13% or so interest today.
But that will involve more TSLA stock fire sales (as that's literally what he did the last time he needed to pay Twitter's bills, his "net worth" is mostly unrealized gains from his shares) and he will face more backlash for that from Tesla investors. His house of cards will collapse quicker the more he resorts to that as there's a limit to how long Tesla investors can stay patient with him treating them as his personal ATM.
While true, we are only talking about $2 to $3 Billion in losses a year.
How long do you think it'd take before Elon truly felt that burn? Maybe 5+ years, right? Maybe longer.
This is a man who conjured up $20+ Billion in cash last year to buy Twitter after all. He can take a few $2 or $3 Billion losses for a while.
Now SpaceX is also losing money and Tesla also looks like it's lost a ton of reputation. So that's what's gonna hurt Elon. But Twitter nonsense is unfortunately a rounding error in all of this.