Comment by bialczabub
9 hours ago
This is just what I was thinking.
Twitter (X) owed $1.3B in debt every year in interest since Musk's takeover. This was before re-financing in a higher interest rate environment. The company was losing $200MM+ per year on ~$5B in revenue before the takeover, and there are reports that revenues have decreased by round 50%.
Best case scenario if we accept those numbers is that X makes $3B per year and about half of that goes immediately out the door in debt payments before paying a cent for the entire business to function.
However, if SpaceX acquires X, that ~$1.5B in interest is a fraction of the $8B In profits SpaceX is allegedly generating annually. Further, they can restructure the debt if it's SpaceX's debt, and not owned by X. Investors will be more likely to accept SpaceX shares as collateral than X.
> The company was losing $200MM+ per year on ~$5B in revenue before the takeover, and there are reports that revenues have decreased by round 50%.
X made a profit last year because they cut costs lower than the drop in ad revenue (which is also slowly recovering). The big question is if they will still be profitable in 2026 year without the US election driving big traffic numbers and ads.
As far as I understand they did not make a profit in 2025. They posted positive adjusted EBITDA, which is not the same.
You're right, wrote that from memory. It was EBITDA that surpassed anything Twitter previously had before purchasing it.
> Despite a revenue drop from $5 billion in 2021 to roughly $2.7 billion in 2024, the EBITDA margin surged from 13.6% to 46.3% due to drastic cost-cutting measures and restructuring
https://x.com/ekmokaya/status/1887398225881026643
How do you "know" this? They're private and don't need to report anything.
You also have to be careful about who said it and what they meant by "profit," because there is gross profit, EBIT, EBITDA, and others.
Banks released pricing to sell their debt. When the debt gets to valued near market value, it means it is essentially guaranteed to get paid back. The company was making much less money but was more profitable, see the other posters comment on EBITDA.
They report these numbers to their investors who leak them to the press.