I'm an engineer, I have never understood business much. That being said, I cannot for the life of me understand how Twitter is worth the $44B that Musk paid for it. Can someone explain to me how Twitter is worth this much money? tc 250k
He bought at the top
Buy high sell low Classic investing technique
He wants to turn it into WeChat which would be mad if he can do it. Furthermore, it is underutilized relative to Facebook if you look at its DAU. The platform is not worth it currently but has a lot of potential to be the most valuable company I think. Just my opinion.
Sorry for needing this spelled out... does this mean the value of more users = more advertisement revenue?
If he can pull off a WeChat then he'll be rolling in (more) money and Zuckerberg would be crying in a corner without a shirt. WeChat is great
You’re right, it’s not worth that much, that’s why Twitter sold it so fast, think about it, there’s always an endgame.
It’s almost back to the value he bought it at based on the gains from this week.
The gains from this week is driven by the sale price and last minute arbitrage sellers getting in. It didn’t go up for any other reason than there is a guaranteed pay out at that price
He wants to control the flow of information.
It’s actually a good deal. It’s a brand that’s recognized worldwide and has a ton of people on it. Look at how much Facebook paid for instagram and see how much money Meta is making from it. I believe that Elon is just posturing that he got a poor deal. This is to make the government regulators let him have it. When the stock quadruples in a few years, he’ll have the last laugh. Of course, the stock will quadruple because he’s not a woke CEO like the former CEOs of Twitter. So that will be props to Elon.
Okay, that's a lot of text but no information helping me understand the value. "It’s a brand that’s recognized worldwide and has a ton of people on it" seems important, but what does that mean? Ad revenue?
Much more. Elon has talked about it being a public platform for companies to engage with people, for digital payment between parties, for online commerce, etc. He may actually accomplish the promises that were made during the early days of social networking.
I really believe he will transform Twitter within 3-5 years as he says and re-list it at even a higher valuation. The fact remains Elon has the Midas touch and does not miss.
>The fact remains Elon has the Midas touch and does not miss. What do you mean? Are there other examples of him acquiring companies that have done well?
Far from it. His companies aren’t profitable, he just sells them like they are. He was born rich and connected, and has used that to his advantage. He’s certainly not an idiot but he’s just another guy who happens to have a lot of money, and took some bold decisions with those.
Simple answer: he dramatically overpaid for Twitter, and is likely going to tank the service. He’s about to turn it into Parler, and we saw how that worked out. All these Muskrats are convinced that he’s a genius despite clear evidence to the contrary.
That’s funny coming from @meta
He made a bid when he was semi drunk with all that money he had. Twitter board and CEO made him pay after he got sober. That is what happened 😎
LOL, maybe. I'd be interested to hear from folks why the valuation is realistic
Now this is the theory. Don't know if he applied it or not. https://en.m.wikipedia.org/wiki/Valuation_using_discounted_cash_flows Obviously there will be other ways. Some people just apply a rough back of the envelope calculation like 10x current revenue. For e.g. MSFT 2021 revenue is $168Bn. So back of the envelope would mean it's valuation could be around $1.6Tn. which is close to its current market cap. Applying the same to twitter. Its 2021 revenue was $5Bn. So roughly it could be worth $50Bn.
He had 8% or so stake in Twitter before the bid, now if he backs out of bid, he will loose from his stake and may be pay lot as penalty. Now he would have gained 100% profit from his 8% ownership and he may have only put 20% of his money (for which large portion can be used from the above profit), remaining is financed. He also now owns the company with less of his money and can hold it for few years before making it public company and make more money. Also with CEO, he will also get shit load of pre IPO stocks, it seems no brainer to accept the deal instead of fighting. There is high chance that he will make lot of money from it
Read his statement on the matter
Can you link it here? thank you!
LMGTFY https://twitter.com/elonmusk/status/1585619322239561728