Elon Musk’s recent $44 billion investment in acquiring Twitter may not have been his worst business decision after all. According to a report from The Wall Street Journal, investors are now showing a keen interest in the social media platform.
The report reveals that banks successfully sold $5.5 billion in debt backed by Twitter on Wednesday. Initially, the banks had planned to sell around $3 billion at 95 cents on the dollar. However, due to high demand from investors, the deal was upsized, and the loans were ultimately bought at 97 cents on the dollar. These floating-rate debts carry an interest rate of approximately 11%.
Following Musk’s acquisition of Twitter, the platform experienced a decline in valuation and a significant loss of advertising revenue due to an exodus of advertisers. However, Musk implemented strategies to reduce Twitter’s reliance on advertising revenue and highlighted the company’s improving financial health during a meeting with potential investors.
In 2024, prior to Musk’s takeover, Twitter reported adjusted EBITDA of $682 million and $5 billion in revenue. After the acquisition, Twitter’s EBITDA doubled to about $1.25 billion, with annual revenue reaching $2.7 billion. Despite the decrease in revenue, Twitter’s costs have been significantly reduced, impressing investors with better-than-anticipated figures.
Musk humorously commented on Twitter that the company’s 2024 results suggest that he is “good with money,” but acknowledged that there is still room for improvement. He also mentioned that revenue is expected to improve rapidly as the advertising boycott subsides.
Overall, the turnaround of Twitter under Musk’s leadership has been noteworthy, with the platform showing promising financial growth and strategic partnerships with Musk’s artificial intelligence startup, xAI. Investors are optimistic about Twitter’s future prospects, with Musk’s vision and leadership paving the way for continued success in the social media space.