In their note, S&P analysts also said that an expected economic recession would weigh on Twitter's advertising revenue next year. If he can generate enough revenue to diversify Twitter's profits without alienating users, that would be a boon, credit analysts said. Musk has also outlined plans for a new subscription service that will include the verification of Twitter users' authenticity and cost $8 per month. In 2021, Twitter had total costs and expenses of $5.6 billion.
Overall, he is trying to find up to $1 billion in annual infrastructure cost savings, including from servers and cloud services. Musk has started to dramatically slash costs, letting go of half of the company's 7,400 employees. That money would be at risk if Twitter required a debt restructuring down the line. Musk and his co-investors collectively cut a check for more than $30 billion of their own money for the Twitter deal. Twitter and Musk representatives did not respond to requests for comment. They have given the company a "junk" B-minus rating. Musk contributes significantly more equity than previously contemplated or significantly improves profitability," S&P Global analysts wrote in a credit research note. "Leverage could spike into the double digits unless Mr.
It's also not clear how much of the $2.7 billion in cash that Twitter held as of the end of June it got to keep once it went private.ĭebt investors and analysts said Musk needs to ensure the company is profitable enough to meet its debt payments or it will require a cash infusion. It's not clear how much of the $5.29 billion debt Twitter had before the acquisition was refinanced or remained with the company. Some aspects of Twitter's current financial health are uncertain, because the company hasn't made enough disclosures.
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