Topline
Twitter is nearing profitability, its billionaire owner and CEO Elon Musk claimed in a Tuesday interview, sharing further details on his lofty long-term aspirations for his social media company and rekindling his hopes for a so-called superapp inspired by Chinese tech giant Tencent.
Elon Musk laid out his lofty plans for Twitter.
Key Facts
Twitter should become cash-flow positive during the second quarter, Musk said in a live-streamed, hour-long interview with Morgan Stanley managing director Michael Grimes.
That would be quite the turnaround for Twitter, which lost $270 million in the second quarter of 2022, the last period in which the company had to report earnings publicly before Musk took the company private.
Though Musk spent much of the discussion touting the merits of advertising on Twitter, he did not provide any details on revenues from the company’s core business, which took a hit in recent months as numerous advertisers reevaluated their dealings with Twitter after Musk cut the company’s content moderation unit and implemented a slew of controversial policies.
One thing Musk did share was his ultimate dream for Twitter: To transform it into his X everything app—a prospect he repeatedly touted at the end of last year that would draw from the popularity of Tencent’s WeChat, which allows users in China to hail a cab, buy groceries and book appointments.
Musk said he believes it’s possible for “X/Twitter…to become the biggest financial institution in the world” where app users can wire money to one another “effortlessly with one click” and earn interest.
Key Background
PayPal, the world’s largest online payment processor, handled $1.4 trillion in transactions last year. Twitter’s revenue was down 40% in December, the Wall Street Journal reported last week, the first insight into the company’s financials since the completion of Musk’s $44 billion acquisition of the company in October. Musk has ruthlessly cut costs as Twitter’s CEO, cutting about 75% of the firm’s workforce and even auctioning off office items deemed unnecessary. Musk claims his efforts “saved” Twitter from bankruptcy.
Surprising Fact
Morgan Stanley is one of the seven banks who provided Musk with $12.5 billion in debt financing for his Twitter purchase. Twitter’s loan repayments did not come up in the Tuesday conversation.
Forbes Valuation
We estimate Musk to be worth $186 billion, making him the second-richest person on earth.
Tangent
Musk sparred with a recently fired Twitter employee in a viral Twitter thread Monday and Tuesday, apparently suggesting the worker’s disability made him unable to perform his role sufficiently.
Further Reading
Musk Trolls Twitter Employee Asking If He Was Fired And Questions Worker’s Disability (Forbes)
If Musk Turns Twitter Into X—His ‘Everything App’—Here’s What It Might Look Like (Forbes)
Source: https://www.forbes.com/sites/dereksaul/2023/03/07/musks-new-twitter-dream-become-biggest-financial-institution-in-the-world/