Elon Musk, the CEO of Tesla, had to dip significantly into his personal finances to cover the ill-fated acquisition of Twitter last year, using billions from his Tesla shares and personal wealth to fund the $44 billion purchase. Additionally, he had to take on a substantial debt of approximately $13 billion from banks.
Following this acquisition, Musk’s tumultuous and questionable leadership led to a mass exodus of advertisers, resulting in a sharp decline in revenues. Subsequent massive layoffs caused disruptions within the company.
Nearly a year later, Linda Yaccarino, who is now the CEO of what was formerly Twitter, is facing the daunting task of picking up the pieces. According to a report by the Financial Times, Yaccarino, who joined the struggling platform in June, is engaging with bankers to assure them that the situation at the rebranded company, known as “X,” won’t continue to drain their resources.
As one of the lenders to X expressed, “She has to get him out,” referring to Musk. “They need ad dollars to come back.”
This is anticipated to be a formidable challenge. Since the disastrous acquisition, Musk has maintained a controversial stance, allowing disinformation, propaganda, extremism, and conspiracy theories to proliferate on the platform, which has alienated advertisers concerned about their brand image.
Yaccarino remains optimistic about the social media platform’s future and recently shared with an audience at the Code Conference that the company is on the verge of breaking even and is expected to turn a profit in early 2024.
In terms of the substantial debt burden, sources from the Financial Times indicate that X is generating enough revenue to at least cover the immense interest payments, which amount to roughly $1.5 billion annually, stemming from Musk’s debt.
The intricacies of the situation behind the scenes at X remain largely hidden, and the company’s short-term objectives remain somewhat vague.
In a recent admission, Musk acknowledged, “we may fail, as so many have predicted,” in a rare moment of self-awareness for an entrepreneur known for impulsive and ill-considered decisions.
The future success of X and its ability to avert eventual failure will depend on Yaccarino’s capacity to regain trust and support from lenders. She will undoubtedly be faced with a myriad of challenging questions on behalf of her organization moving forward.
from Firstpost Tech Latest News https://ift.tt/lAHYIOt
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