Musk Denies Email Admitting To ExTwitter’s Struggles, But Banks’ Desperation Tells A Different Story

For the past couple of years, Elon has tried all sorts of ways to publicly claim that things are going great since his purchase of Twitter, even as basically everyone knows that he’s the emperor with no clothes on that one.

He’s been claiming that traffic and usage are at “all-time” highs, despite little outside evidence to support that and plenty to suggest otherwise. Indeed, a closer look at the stats he reported shows that, when put into context, they actually point to a massive decline in users. And, of course, it’s well-documented that advertisers have abandoned the platform in droves. The bankers who backed the deal, despite its rather obvious problems, have admitted that it’s probably the worst buyout of all-time.

Yes, Elon has leveraged his position as First Troll (along with hundreds of millions of dollars in political donations) into a position of power in the Trump administration, but that doesn’t seem to have helped right the sinking ship that was once called Twitter.

Buried somewhat in a Wall Street Journal article about the banks desperately trying to unload the Elon Twitter debt they’re holding is the claim that Elon has admitted in internal emails that he’s basically destroyed what once was Twitter as a business:

In a January email to staff, Musk pointed to the company’s growing influence and power, but said the finances remain problematic.

“Our user growth is stagnant, revenue is unimpressive, and we’re barely breaking even,” he said in the email, which was reviewed by The Wall Street Journal.

After that quote started to get some attention, Elon took to ExTwitter to deny having sent that email:

While the MAGA crowd often claims the mainstream media “makes up” critical stories about their heroes, that’s simply not how outlets like the Wall Street Journal operate. The Journal, in particular, is known for its conservative editorial slant, so it would have little reason to fabricate an anti-Musk story. A reporter being misled is possible but would be quite surprising.

More telling is that Elon doesn’t actually deny the underlying claims about stagnant user growth or unimpressive revenue. Though, I doubt the company is even remotely close to breaking even.

Given the company’s well-documented struggles, it is absolutely believable that user growth is stagnant and revenue is unimpressive.

The article also details how the banks are trying to unload the loans for pennies on the dollar. But… there have been reports of them trying to unload this debt for two years now. As the article notes, normally the banks would offload such debt within weeks or months, but they’ve been unable to do so with these toxic Twitter loans:

Banks don’t finance acquisitions intending to hold the buyout debt for long; usually, they will arrange a sale to outside debt investors within months of their commitment to finance the deal. But in volatile periods, when fewer investors are lining up as buyers, banks will opt to hold on to the loans for longer stretches to avoid selling it at a discount, locking in losses. 

With the X debt, the banks have waited—and waited—for a moment when both the markets and the company’s financial health would open the window to sell without huge losses.

They might have to keep waiting. It really sounds like the banks believe now is probably their last chance to get rid of the debt before the losses get even bigger. They’re likely betting that Elon’s closeness to Trump (for now) will make the debt more appealing to investors looking to curry favor with the administration.

In other words, the banks seem to be hoping that Elon’s current political clout carries over to the toxic assets associated with him.

Of course, that’s making a bet that Elon and Trump will remain aligned, which is possible, but is certainly no guarantee.

In the end, no amount of trolling or Trump-flattering may be enough to save ExTwitter from the hole Elon has dug for it. The banks seem to have realized this and are now scrambling to cut their losses. It remains to be seen whether Elon himself will ever be able to actually admit defeat and take responsibility for running one of the internet’s most influential platforms into the ground as a personal vanity project.