Tesla CEO Elon Musk opted to finance his Twitter buy with a combination of equity and debt financing, with $13 billion of the $44 billion coming in the form of debt.
What Happened: As Twitter struggles to turn things around and generate cash flow amid a tough macroeconomic condition, servicing of the debt could be a tall order for the Musk-led social media platform.
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A recent report in The Wall Street Journal suggested that the billionaire’s representatives discussed selling up to $3 billion worth of new Twitter shares to retire the high-interest portion of the debt package.
Musk, however, has refuted the report. When one of his followers shared the news on Twitter, tagging him, he had a one-word answer for it.
“No” Musk said.
Why It’s Important: A scoop shared by Platformer’s Zoe Schiffer earlier this month said Twitter’s revenue fell 40% year-over-year.
A separate report by Information said the platform’s fourth-quarter revenue fell 35% year-over-year due to a slump in advertising income. Ad revenue made up 91.5% of Twitter’s total revenue in the second quarter — the quarter for which the company last publicly disclosed financial results.
Overall ad spending by Twitter’s top 30 advertisers fell by 42% to $53.8 million in November and December combined, Reuters reported, citing data from Pathmatics.
Musk completed the Twitter takeover in late October.
Read Next: How Did Elon Musk Make His Money
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