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Musk orders Twitter to cut infrastructure costs by $1B – sources

reuters.com

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Re: Musk orders Twitter to cut infrastructure costs by $1B – sources

#151

Post by tjr225 »

akudha wrote: post #118
tjr225 wrote: post #42

I dislike Elon Musk as much as the next guy but why are people upset about Twitter burning to the ground? It’s just another paint brush used to paint the downfall of our society. Good riddance. I hope Elon goes under with them. This is a platform built on driving clicks and driving clicks on fear and anger. More fear = more clicks = more ad revenue = negative feedback loop. Just like the New York Times. Just like NPR…

It doesn’t matter if Twitter burns to the ground. Some other shitty website will take its place. Instead of raging against shitty media, we should concentrate on creating better media. It is exceptionally hard though. There are independent (relatively) media like TYT. These have their own problems, but at least they’re better than shit like Fox

Ok but I’m not raging, I just don’t know why I should care about any of this in spite of it being shoved into my face 24/7 for weeks at a time???

Re: Musk orders Twitter to cut infrastructure costs by $1B – sources

#152

Post by rad_gruchalski »

afavour wrote: post #63
8f2ab37a-ed6c wrote: post #24

Earlier quoted context omitted.

It's an app for billionaires and journos to crank out viral memes, not a pacemaker. The world will be ok.

Not really the point here. If you spent tens of billions purchasing Twitter you presumably don’t want the world to be without it. You have a very active interest in making it a success.

From the buyer’s perspective the only result that matters is the profit.

Re: Musk orders Twitter to cut infrastructure costs by $1B – sources

#153

Post by nikau »

tinus_hn wrote: post #125
tluyben2 wrote: post #110

Earlier quoted context omitted.

That is indeed what I meant; with very little effort and not having much knowledge about database internals, you can save a ton of money. It won’t be perfect that way, but goes a long way vs no indices at all. So that’s why ‘no reason’. Aka very low hanging fruit. Sorry for not being clear and thanks for explaining.

No to mention adding an index is practically without risk, the outcome of queries is the same except probably faster.

Tell me you haven't used spanner without telling me...

Re: Musk orders Twitter to cut infrastructure costs by $1B – sources

#154

Post by mlindner »

7e wrote: post #129

Musk failed to deliver the $35K Model 3 and Starlink prices are rising. I doubt there is a billion dollars left lying on the table, at least not accessible to a man of Musk’s nature.

Right now Tesla has waiting lists so long they've head to shut off ordering of new vehicles. They hardly need a vehicle that's any cheaper at this point.

Additionally, Starlink has so many people wanting to use the service that the entire eastern half of the US is basically at capacity because demand is too high.

Increasing prices for both products seems like a very good idea.

Re: Musk orders Twitter to cut infrastructure costs by $1B – sources

#155

Post by trowawee »

humanizersequel wrote: post #145
trowawee wrote: post #134

Earlier quoted context omitted.

You do not seem to know what you're talking about. The 12.7bn that was borrowed is going on Twitter's books. Their debt load prior to this leveraged buyout was 5.5bn; it's now 18.3bn[0], with yearly interest payments of roughly 1bn. [0]: https://www.barrons.com/articles/tesla-stock-twitter-debt-51...

>yearly interest payments of roughly 1bn This is on top of the principal? They pay 1bn every year and none of it counted against their debt?

Yes, that's just for the interest.

Re: Musk orders Twitter to cut infrastructure costs by $1B – sources

#156

Post by trowawee »

credit_guy wrote: post #150
afavour wrote: post #149

Earlier quoted context omitted.

You may need to change your username. The debt is assumed by Twitter and it is liable for $1bn a year in interest payments: https://www.nytimes.com/2022/10/30/technology/elon-musk-twit...

Haha, I'll give that serious consideration. Now, I read that NY Times article, and I guess the crucial sentence that you are referring to is To do the deal, Mr. Musk, the world’s richest man, loaded about $13 billion in debt on the company, which had not turned a profit for eight of the past 10 years. Now, I'm not privy to the deal's details, but since you appear to be more informed, maybe you can clarify something f…

You go to a bank and tell it "I would like to buy this company. It has assets worth $N, which could be put up as collateral for a loan of $(.60 x N)." The bank says "Yes, those assets are worth that much. We will sign a contract with you where we will give you $(.60 x N) and in return, once you successfully purchase the company and it is your property, those assets will act as collateral for that loan."

You take the loan (and probably some other money, since by definition the loan is less than the total value of the company's assets), and you go buy the company. You now own the company, therefore you own the assets, therefore you can use them as collateral, and so: the debt that was yours is now on the company's books. You bought out the company with extra leverage provided by the assets you were acquiring: leveraged buyout.

It tends to fail; LBOs tend to target companies that are struggling somehow, and loading an already-struggling company with a shit load of debt frequently results in a bankruptcy. You're probably familiar with companies that dies this way. (My favorite example for fellow millennials is Toys'R'Us.) If you find this troubling: you are correct. But you have forgotten the really important thing: you (or, in most LBOs, a bunch of private equity ghouls) have gotten very wealthy killing a company, and isn't that reward enough?

Re: Musk orders Twitter to cut infrastructure costs by $1B – sources

#157

Post by hnfong »

humanizersequel wrote: post #145
trowawee wrote: post #134

Earlier quoted context omitted.

You do not seem to know what you're talking about. The 12.7bn that was borrowed is going on Twitter's books. Their debt load prior to this leveraged buyout was 5.5bn; it's now 18.3bn[0], with yearly interest payments of roughly 1bn. [0]: https://www.barrons.com/articles/tesla-stock-twitter-debt-51...

>yearly interest payments of roughly 1bn This is on top of the principal? They pay 1bn every year and none of it counted against their debt?

That's about right.

1bn/18.3bn = 5.4%

"Risk free" treasury bond yields are ~4.x%

1% premium for the risk seems reasonable given that Twitter is not known for making profits. Presumably some of the debt were incurred before the rate hikes so it's kind of on the low side.

Re: Musk orders Twitter to cut infrastructure costs by $1B – sources

#158

Post by hnfong »

tcmart14 wrote: post #94
koyanisqatsi wrote: post #92

Earlier quoted context omitted.

I don't think ad-tech is going away anytime soon. It would be nice but it's not gonna happen because the fundamental problem is not the ads but the fact that most social networks are not sustainable without advertising so the platform participants end up being treated like cash cows that are milked for all they're worth. If Twitter was paid for by its participants then they would not have to put up with advertisers.…

And the worst part. I think there are a lot of us who would be willing to pay for being on a good social network without ads, but I don't think there is enough of us. Too many people have been trained via myspace, facebook and twitter that social media is just "free." It it is going to be hard to change the masses on that.

As long as somebody has friends who can't afford say $10 per month for social media, the network effect takes over and the result will inevitably be ad-ridden crap.

I might be willing to pay to turn off ads and tracking on such a platform, but if all the middle-class+ people pay to turn off ads, which advertisers would want to spend money targeting "poor" people and people too cheap to pay a couple dollars for using social media?

Re: Musk orders Twitter to cut infrastructure costs by $1B – sources

#159

Post by drewbug01 »

unboxingelf wrote: post #89
drewbug01 wrote: post #82

Earlier quoted context omitted.

> I believe they are on AWS, so hardware costs are already taken out of the equation. If so, even just moving to on-prem would save them the $1B easily. They already run their own datacenters (not uncommon for companies started in that era). They have moved partially into the cloud for data science stuff - GCP, not AWS, according to their engineering blog. So… odds are that there isn’t nearly as much waste as everyon…

DC is far more cost effective than public cloud for data intensive workloads.

Right, which is why they only executed a partial migration for certain workloads that make sense: https://blog.twitter.com/engineering/en_us/topics/infrastruc...

I think what really irks me is this meme that “obviously they have massive infrastructure waste.”

Does anyone have credible evidence that there is enormous waste in Twitter’s infrastructure? Just because Musk says “cut $1b in infra spending” doesn’t mean that there is $1b of things to cut, just lying about being wasted. Some of the smartest minds in our industry work/worked at Twitter. Are they that bad at their jobs?

What is actually going to happen is this: they’ll turn off all of their data warehousing stuff, blinding the business. They’ll cut their redundancies and backups, reducing the probability that they can do effective DR. They’ll reduce spending on observability so far that they won’t even know what’s going wrong (it’s surprisingly expensive). And that’ll get them to the $1b in cuts - by flying blind (both in a business sense, and a technical sense), and just hoping they don’t need to recover from a disaster.

Re: Musk orders Twitter to cut infrastructure costs by $1B – sources

#160

Post by credit_guy »

trowawee wrote: post #156
credit_guy wrote: post #150

Earlier quoted context omitted.

Haha, I'll give that serious consideration. Now, I read that NY Times article, and I guess the crucial sentence that you are referring to is To do the deal, Mr. Musk, the world’s richest man, loaded about $13 billion in debt on the company, which had not turned a profit for eight of the past 10 years. Now, I'm not privy to the deal's details, but since you appear to be more informed, maybe you can clarify something f…

You go to a bank and tell it "I would like to buy this company. It has assets worth $N, which could be put up as collateral for a loan of $(.60 x N)." The bank says "Yes, those assets are worth that much. We will sign a contract with you where we will give you $(.60 x N) and in return, once you successfully purchase the company and it is your property, those assets will act as collateral for that loan." You take the…

So let me recap: you (Musk) get a loan ($12.7 BN) from banks, with the idea that the company you buy will be used as a collateral. Before the sale is closed, you can't put it on the company's balance sheet, because you don't own it. But after that you can.

Wait a second. It's true that Musk now owns the company, but transactions between the company and its (sole) owner are still at arm's length, arent's they?

As a pure coincidence, today I received in the mail the bankruptcy ruling for a preschool that went bust and where we have paid $3000 in advance to enroll our daughter. The judge ruled we'll get $1400. But during the lawsuit it transpired that the owner gave himself a nice loan of more than $100k. He had to give the money back (I don't know all the details, although I can find out; I think he settled for a somewhat smaller amount).

Maybe I'm naive, but I think that should happen with larger companies too. Just because you are the sole owner of a company does not mean the company can just lend you money on whatever terms you decide. It's the ultimate conflict of interests.

On the other hand, if the prior shareholders cooperated with Musk, I can see how the debt could be on Twitter's books. But then, it's them who saddled the company with debt, isn't it?

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