Twitter Could Be Capital-Positive Within Months, Says Elon Musk

The record of Elon Musk in terms of having the ability to say things and then have them come true hasn't been great. To put it another way, he loves to make promises and then break them right after he has made them. In another way, you could say that he is full of it. For example, he has repeatedly stated that his biotech company, Neuralink, is on the verge of being approved for human trials. I'll let you in on a little secret: it's not.

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So maybe you should take a grain of salt when it comes to his most recent comments. In an interview he gave at Morgan Stanley's tech conference, Musk claimed that all of the cuts he made at Twitter (such as the mass layoffs and reductions to employee benefits) had paid off as a result of cost reductions. "I believe that we have a chance of being capital-positive next quarter," he said during the event, which was also streamed live on Twitter as part of a live webcast. Musk went on to say that his platform's user numbers were also on the rise, which contributed to the gains on the platform.

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Although it's impossible to predict the future, and you can't know for sure that Musk's new claim about Twitter's finances is 100% untrue, Gizmodo can tell you that it is... very unlikely that it will happen. Recently, the man claimed bankruptcy was a distinct possibility for the social company and was seeking $US3 ($4) billion from investors. Furthermore, Twitter's office buildings have not been paying commercial rent, which has caused controversy. Yes, that might initially save you a little bit of money, but it certainly won't be enough to cover the long-term costs of numerous legal fees that are going to have to be paid out.

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Would it be possible for us to quickly go back to Musk's many broken promises in the past? The multi-hyphenate CEO of Tesla last wrote an article back in 2016 that stated that the company would expand its electric vehicle line to "address all major segments" of transportation, including "high passenger-density urban transport," within the next year. It didn't work out that way. Musk has since ceased to pursue any form of mass transit technology, aside from the extremely lame, Las Vegas “loop” which isn't really mass transit at all, but rather a glorified single-lane tunnel that's been renamed as “mass transit”.

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It would be interesting to know what Musk said when he said he would not fire three-quarters of the Twitter staff following his acquisition of Twitter by him. In fact, he did - and then some.

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Musk's $US44 ($61) billion purchase of Twitter came with nearly $US13 ($18) billion worth of debt attached to it, as part of Musk's $US44 ($61) billion purchase. It is estimated that the first interest payment on that debt alone will cost about $300 million ($416). Managing the debt of the company will cost the company an estimated USD $1 billion ($1 billion) per year, according to a report by Trade Algo. Musk would have to offload more than 8,500 employees in order to make up for that difference. If an average salary of $US117,000 ($162,419) per year is assumed, Musk would have to offload more than 1,000 more workers than Twitter had prior to Musk's takeover.

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As much as Musk has hollowed out Twitter to the best of his ability so far, there are simply not enough people he can fire in order to recoup the costs incurred when he purchased the company in order, to begin with. As well as that, we know that he has had to bring on at least two new staff members to deal with the situation: his bodyguards. According to a BBC report, billionaire Mark Zuckerberg has become so enmeshed in the social media platform that he is accompanied at all times by at least two beefy security men - even on bathroom trips - who are accompanied at all times by at least two security men.

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Additionally, Twitter has lost all the advertising revenue in the form of ads and has failed to attract subscribers via Twitter Blue in the form of subscription revenue. The fact that Musk claims to be gaining users on his platform does not necessarily imply an increase in revenue, despite Musk's claims. Furthermore, since Twitter is now a private company, it does not have to report information like the number of users or revenue - there is little accountability here since the company isn't required to do so.

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As a final point, Musk's promise of a "capital-positive" soon is not backed by history. It is estimated that Twitter, in its nearly decade-long history as a public company, had only ever experienced one profitable year (2019) prior to being acquired by the billionaire. The fact is that though it's a website that's good at sucking up my time and attention, it's not great at making money.

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Musk also mentioned in the conference interview that Tesla's next-generation car would be able to operate mostly autonomously, according to Reuters, which is another bonkers statement Musk made during the conference interview. In spite of the fact that Tesla is currently on pause following a safety recall, the company is the subject of multiple federal investigations into possible false claims and safety concerns associated with the (not) "Full Self-Driving" feature of the car.

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Aside from this, Musk further added that X, which he claimed would be the world's largest financial institution, although it is not yet in existence, could "become the biggest financial institution in the world." Also, he claimed that Twitter was a more reliable and non-biased news source than the news media, and he stated that democracy and civilization on our planet could end in disaster if it weren't for his platform.

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As a bonus, Musk claimed toward the end of the Morgan Stanley interview that SpaceX's technological advances would eventually enable mankind to live on more than one world, and waxed poetic about the numerous long-dead "one-planet" civilizations he believes may have once existed throughout the universe.

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This is actually a lot of big predictions from a guy who does not even know how to deliver a truck on time, and he makes them all the time.