Hot Features
Premium
Register to chat with like-minded investors on our interactive forums.
By “setting the bluebird free”, Elon Musk has opened Pandora’s box. Unless the company finds new sources of revenue, it could end up in bankruptcy. Will “the Iron Man of our world” manage to turn the social media platform, considering that in eight of the last ten years the numbers were in red – remains a question.
The good news is filing for Chapter 11 of the Bankruptcy Code doesn’t necessarily mean that Twitter will vanish. Otherwise, we wouldn’t have Apple, General Motors, Six Flags, etc. This procedure allows the company to “undergo a reorganization of its business affairs, debts, and assets.”
The bad news is that selling “blue ticks”could bring more problems than benefits. According to media reports, the platform has seen an increase in fake accounts. The list of victims includes but is not limited to Tesla and SpaceX, Roblox, Nestle and Lockheed Martin, and drug maker Eli Lilly.
It is rumored the latter even lost $15 billion in market cap after a Twitter Blue verified account impersonating the brand promised free insulin. A similar story happened to Lockheed Martin. If the theory finds its validation, the consequences of the “Internet trolls” tweets could cost Twitter billions of dollars.
Talking about the winners, the first place would go to Twitter’s former shareholders. If the company were still public, its shares would fall way below the price Mr. Musk paid for the platform. No doubt, the wealthiest person on the planet regrets the acquisition of the company-zombie.
Some even suggest that this deal “will go down as one of the most overpaid tech purchases in the history of M&A deals.” Still, it’s hard to believe that Musk will let $44 billion down for nothing. Thus, there is a high possibility he will have to resort to selling Tesla stocks in order to maintain Twitter alive…
