Bloomberg: Musk Warns Twitter Bankruptcy Possible as Senior Executives Exit
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Re: Bloomberg: Musk Warns Twitter Bankruptcy Possible as Senior Executives Exit
#2How is it legal to be able to get a loan to buy a company, then transfer that loan to the company you bought, then let the company burn to the ground from the crushing debt?
Re: Bloomberg: Musk Warns Twitter Bankruptcy Possible as Senior Executives Exit
#3How is it legal to be able to get a loan to buy a company, then transfer that loan to the company you bought, then let the company burn to the ground from the crushing debt?
This called a "leveraged buyout". Everyone who learns about them is shocked, and they absolutely should be illegal, but they aren't. It's very common for companies purchased in this way to go bankrupt, because the debt is too heavy a burden. Many name brand companies have gone down over the last decade because of this.
Re: Bloomberg: Musk Warns Twitter Bankruptcy Possible as Senior Executives Exit
#4How is it legal to be able to get a loan to buy a company, then transfer that loan to the company you bought, then let the company burn to the ground from the crushing debt?
Wall St. calls it "Creative Destruction"
Re: Bloomberg: Musk Warns Twitter Bankruptcy Possible as Senior Executives Exit
#5How is it legal to be able to get a loan to buy a company, then transfer that loan to the company you bought, then let the company burn to the ground from the crushing debt?
This called a "leveraged buyout". Everyone who learns about them is shocked, and they absolutely should be illegal, but they aren't. It's very common for companies purchased in this way to go bankrupt, because the debt is too heavy a burden. Many name brand companies have gone down over the last decade because of this.
Lot of people who trusted Elon are going to lose their money then. Are we going to see consequences on Elon's well being?
Re: Bloomberg: Musk Warns Twitter Bankruptcy Possible as Senior Executives Exit
#6How is it legal to be able to get a loan to buy a company, then transfer that loan to the company you bought, then let the company burn to the ground from the crushing debt?
Why shouldn't it be legal? The entities that gave the loan knew the risks.
Re: Bloomberg: Musk Warns Twitter Bankruptcy Possible as Senior Executives Exit
#7I wonder if the downfall of Twitter will herald the start of the adpocalypse—advertisers realizing en masse that the ROI of internet advertising isn’t worth the spend.
Have advertisers ever completely pulled out so abruptly from such a large platform before? If they notice that their revenue remains within forecast intervals, perhaps they will realize that their Twitter ad buys were doing nothing for their bottom line, and investigate whether ad buys on other platforms are similarly worthless.
Re: Bloomberg: Musk Warns Twitter Bankruptcy Possible as Senior Executives Exit
#8Re: Bloomberg: Musk Warns Twitter Bankruptcy Possible as Senior Executives Exit
#9Earlier quoted context omitted.
This called a "leveraged buyout". Everyone who learns about them is shocked, and they absolutely should be illegal, but they aren't. It's very common for companies purchased in this way to go bankrupt, because the debt is too heavy a burden. Many name brand companies have gone down over the last decade because of this.
Lot of people who trusted Elon are going to lose their money then. Are we going to see consequences on Elon's well being?
Those people should have done more diligence. The text messages with Larry Ellison show he committed 1 billion dollars more or less on a whim.
It's pretty easy to see now that buying Twitter and saddling it with debt was never going to work.
Re: Bloomberg: Musk Warns Twitter Bankruptcy Possible as Senior Executives Exit
#10How is it legal to be able to get a loan to buy a company, then transfer that loan to the company you bought, then let the company burn to the ground from the crushing debt?
Why shouldn't it be legal? The entities that gave the loan knew the risks.
> Why shouldn't it be legal?
Because it's destructive to the economy. The only winners when this happens are the execs who arranged the deal, which is why Twitter's execs pushed so hard for the Musk deal to close even though the outcome was going to be bad for everyone else.
To put it another way - a lot of businesses would still be operating and a lot of people would still have jobs if LBOs were illegal.