Telling advertisers to “screw themselves” is usually a winning strategy if you’re running a social media site that relies on advertising revenue.
And Elon Musk, former owner of X, is doing it the hard way.
Or if it already is, it is about to be. Because, while it’s suing those advertisers for not buying classified ads on Twitter (which is exactly what it told them to do), the company is in one of its worst financial problems yet: in the United States, according to internal figures received through the New York Times, a drop of 53% compared to the same quarter last year.
Now, as Fortune reports, the scenario is so dire that even longtime Tesla investors predict that Musk would possibly have to sell some of his own stock in the automaker to shore up his failing website.
“I would expect $1 billion to $2 billion in stocks,” Bradford Ferguson, president and chief investment officer of asset manager Halter Ferguson Financial said in a comment on YouTube on Wednesday, quoted by Fortune, noting that this could lead to a stock drop. It loses between five and ten percent of its value.
“It’s a huge gap that they have to fill,” he added.
This is the last resort Musk has used in the past.
In 2022, after several disastrous months following the acquisition of Twitter in the fall, Musk sold more than $7. 5 billion worth of Tesla stock between November and December. He said he “definitely” wouldn’t possibly sell again until at least 18 to 24 months after that, or “probably” not until 2025.
But he also made a pledge that same year, in April, after selling about $7 billion worth of the automaker’s stock to fund his deal with Twitter.
The fact is, Musk is willing to trick his own investors out of a huge monetary vacuum, one that Fortune says looks like a staggering 84% drop in profits through the second quarter of 2022, before his purchase. privately.
And it’s not just the advertising crisis that’s contributing to the site’s decline. The number of active users has declined by about 23%, according to research published in March.
With all of this in mind, Musk will have to see what is on the wall at some point, which means he may just turn to promoting stocks again.
“The hemorrhaging of
Ferguson says Musk may need the money to meet the terms of his loan agreement for $13 billion in debt incurred through Twitter as part of his plan to buy the platform.
Whatever decision Musk makes to get his way, Twitter’s current trajectory on the business front is far from sustainable, and it turns out it’s only a matter of time before its owner’s reckless decision-making comes back to haunt him. occur.
More on Twitter: Elon Musk invents a cyberattack after injuries and burns in an interview with Donald Trump
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