Elon Musk has wasted no time in making drastic modifications to Twitter. Every week after the deal closed to purchase the corporate, Musk laid off half of its international workforce together with the vast majority of the Twitter Australia workforce, as reported by 9 papers.
He’s additionally increasing the platform’s verification system — a function that gave accounts belonging to folks of public curiosity what was anecdotally referred to as a “blue tick” to point their authenticity — to anybody who will stump up US$8 month-to-month for Twitter Blue (which additionally features a handful of different perks). Social media specialists have warned this alteration may imperil the platform by permitting extra misinformation and scams.
So, how will it change? There have been infinite makes an attempt to decipher Muskology as instructed by way of the mercurial billionaire’s tweeting about imprecise free speech platitudes and (generally literal) shitposts. Even earlier than Musk had been formally handed the keys, some had flocked to the platform in anticipation of the brand new regime; others fled. Main advertisers have paused their spending as they wait to see how the platform modifications. His observe document of inflated guarantees, backflips and contradictions makes it arduous to foretell his subsequent transfer, not to mention sketch out a coherent ideology.
The important thing to understanding Musk’s plans for Twitter is one easy quantity: US$1,000,000,000. That’s reportedly the quantity that Twitter should now discover to pay the annual curiosity on the loans Musk took out to purchase the corporate.
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Traditionally, Twitter has by no means made some huge cash. The corporate solely turned a modest revenue in two out of the previous 10 years of operation. Now, Musk has to search out US$1 billion on high of working prices simply to service the US$13 billion in loans taken out to pay for the corporate’s (somewhat inflated) price ticket of US$44 billion. For context, final 12 months the corporate introduced in US$630 million in income and paid about US$50 million in curiosity.
That’s an unlimited further sum of cash simply to maintain the corporate afloat. And if the stakes of bankrupting a vital platform weren’t already sufficient, Musk’s loans are reportedly borrowed in opposition to his Tesla inventory, which means any failure to pay may additionally imperil his maintain over the electrical automotive firm.
In brief, Musk has lots driving on with the ability to remodel a social media cash pit into an ATM amid more and more gloomy financial situations. That’s why he’s keen to essentially alter the platform’s mechanics and hearth essential employees — not due to ideology however out of desperation.
Whether or not you imagine Musk when he says he purchased Twitter to “assist humanity” or as a result of he’s a billionaire who loves the eye the platform has given him, it’s clear he valued what Twitter was. Sarcastically, his resolution to purchase the corporate will essentially change his favorite social media platform — if it survives, that’s.