If you've been following the tech billionaire's activities concerning Twitter, you'd know that it's been a wild ride. Now, Elon Musk is trying to encourage investors to pay $54.20 per share, which is the price he paid when he bought the platform.
Should You Invest?
It's hard to invest in a company that's always involved in some kind of a mess. Twitter has not had a quiet day since Musk acquired it. This begs the question, is it worth it to invest your money? That's for you to decide, but the cards laid out aren't looking so good.
The platform has been involved with some nasty business lately, like advertisers running for the hills and journalists being suspended for posting about Jack Sweeney. That being said, Musk is still selling shares at the same price when he reluctantly bought them.
It doesn't bode well for the Twitter owner that he himself said that he overpaid for the platform, as mentioned in The Verge. Ross Gerber, an investor in Tesla, even said that it was hard to tell whether the tech mogul created or destroyed value at Twitter.
Gerber also mentioned that they offering shares because they were running out of money, and that Musk did not expect a big drop in revenue. Jared Birchall, Musk's financial manager, proposed the new shares to Twitter's shareholders as well.
Is Twitter Bleeding Money?
The social media platform has been bleeding cash as they try to catch up on interest payments and debts. Acquiring Twitter came with a $13 billion debt outside the equity capital of around $7 billion, according to Financial Times.
Musk's solution then was to reduce the workforce of Twitter, but that did the opposite of what was intended. Removing valuable employees caused Twitter to become somewhat of a chaotic playground, which scared advertisers away and put its $5 billion a year advertising business on life support.
Even Musk was pulling from his other companies, specifically Tesla. He sold Tesla shares again recently, which was the fourth time he has done it. Overall, the shares sold amounted to around $40 billion. The recent sale came after Musk said he wouldn't sell Tesla shares anymore.
Insider Intelligence, a market research company, even said that the company is set to lose more users over the next two years. It could be due to the changes made by the new Twitter CEO, according to Reuters.
They expect that Twitter will lose users in the US more than in any other country, and that Twitter could lose around 50.5 million users by 2024, which hits a record low since 2014.
Jasmine Enberg, the principal analyst of the market research company, said that users will start to grow frustrated at the technical issues and proliferation of hateful or other kinds of insensitive content.
The Twitter Blue subscription is one of Musk's attempts to bring in revenue for the company, but it is still yet to be seen whether that could be enough to save the company from biting the dust. But based on his recent offer of Twitter shares, it might not be.
