I don’t understand why people keep saying this. Twitter was a public company. You can see from their financial statements that they recorded positive operating income for all of 2021.

Not very positive! They weren’t a great business!

Then they had to pay a huge fine, and lost a bunch of money because of it.

But they weren’t operating at a loss. Certainly not “millions a day.” Where do people get that figure?

2020, they had a $1B net loss for the year. 2019, they had a $1B net gain.

I dunno, it’s clear they were a weird and not great business. But like, they weren’t JUST lighting cash on fire.

It's frustrating to regularly hear people (particularly on HN, but not exclusively) justifying, or even just giving a light nod of approval, to Musk's horrendous "leadership" via firings, simply because twitter isn't profitable in their eyes.

It seems like cherry-picking excuses to support Musk's leadership style rather than any justified basis. If the parent comment is correct, they just aren't as profitable as Wall Street would like (therefore they are not "profitable"). Saying that the firings are justified is then just moving the goalposts to support an a-priori conviction.

Additionally, it seems ironic that this is coming from proponents of the Silicon-Valley ethos of "screw profitability, we'll figure it out later"... an ethos that created Amazon and so many other tech titans. Yes, profitability matters, but only when your other forms of capital (e.g., social, political) have been depleted.

It's tragic that Musk is depleting whatever capital twitter had remaining on its current death march. Financially "profitable" or not, twitter did undeniably have social and political capital. Soon, it will have neither.

It isn't cherry-picking.

Twitter has a very long runway where > 90% of its existence it was making a loss.

Where competing social networks have exponentially grown in size (FB, Insta, Tiktok, even Reddit), Twitter has stagnated.

Twitter is widely known to never really ship anything. So I have no idea which "velocity" the author is talking about.

Before the musk take-over, a plan was already in the works to cut 800M in expenses.

May I remind you that Twitter almost went bankrupt in 2016? They tried to sell but nobody wanted it.

It’s because people are looking at him and saying, “whoa, I can behave like that and not only get away with it, but win by it?!”

There’s room for sincere curiosity about what’s going on and what’ll happen, but a lot of what I see online is people just relishing in the sadism of the whole ordeal.

The cruelty does seem to be the point.

Not sure how we escape that the gravity of it.

Part of the mostly made up version of the American Dream is like "pull yourself up by your bootstraps" which oddly also implies "and then once you have, close the door behind you. Don't want this party getting too crowded". My point is that fetishizing capitalism requires a taste for squeezing others for all their worth. If others aren't, then that means you endured that bootstrap pain for no reason!

I mean, if you don't like Twitter, and don't like musk, the whole thing is very entertaining

lulz certainly abound here--there's been a lot of great comedy in this.

But I read the GP to mean they've seen people crossing a thin line.

I doubt any of us are above a bit of schadenfreude when the fates deal a fair dose of karma to someone we think deserves it.

But actively cheering (and trying to multiply, in the case of aggressive trolling) the sadism in public is a kind of dark prayer.

Spot on.

Oh, some highly paid people (that made product that actively made society worse) will need to find a new job, how utterly sadistic /s

Finding pleasure in the suffering of other people is quite literally the definition of sadism. Be proud of it if you want, but that’s what it is.

I think this is nearly as destructive of a perspective. People have become way, way too obsessed with what is entertaining and are willing to accept way too much horrible stuff in the name of the lulz.

It’s really not a game show. There are important ideas being tested and norms being created (or destroyed).

How is it horrible? In my view, Twitter is actively harmful to society, so seeing it crash and burn is not only funny, but looks like a good thing, even if it means some highly-paid SWEs need to find new jobs.

A 160MM+ DAU social network “crashing and burning” doesn’t mean “poof” one night and it’s gone.

The biggest self-own in the industry will be if Elon is successful and then the whole software industry suddenly is inspired not by (yes, perhaps excessive) kindness/comfort/generosity of a good work life but by cut throat PE-style management with an added layer of emotional manchild tantrums.

There’s a reason VCs are cheering this on and it’s because lower standards in the software industry will save them all money.

Well hopefully Twitter will completely implode and what's left will be sold off for a tiny, tiny fraction of what Elon spent for it. Then the VCs will have to come to grips with the idea that having lower standards and cutthroat management doesn't result in profitability, but rather utter failure.

Well I see Twitter in its previous form as actively harmful to society, especially since few years ago when Twitter decided that they no longer just show what's popular but actively manipulate it [1]. Like, the short format was bad enough on its own (encourages shouting in the void instead of actual discussion), and that's just more bad on top of bad

And I also see musk's compulsive lying and arrogance as harmful, althought in more limited scope.

So from my perspective it's one bad thing destroying other bad thing. What's not to be happy about ?

Sure, Twitter transforming into not a vile piece of shit it is today into something decent would also be nice outcome but I don't even know how that would work so it burning is next best thing.

* [1] https://www.forbes.com/sites/olliebarder/2022/11/14/japanese...

There are a lot of things to criticize about Twitter but it shows a lack of imagination if you think the worst possible thing you could do with a 160MM+ daily active users is give them short form conversation dynamics, and that the other possible outcome is “it burns.”

It is absolutely possible that Twitter turns into a 4chan-esque cesspool of vitriol and hatred but at massive scale due to a gradual frog boil of 160MM+. Not to say Twitter had none of this, but again, it takes little imagination to worry about it getting much, much worse.

>to Musk's horrendous "leadership" via firings

He isn't firing those people as a component of "leadership", he's clearly cleaning house. He doesn't _want_ the vast majority of twitter staff to remain for obvious reasons.

He obviously doesn't want the majority of staff to say. I don't think it is for obvious reasons. In fact, I doubt he knows what the majority of the staff does, he just assumes it's obvious.

What's the obvious reason?

Let's just say Twitter staff weren't very happy and vocal about it when before acquisition he said he want it to be more free speech platform, and most of those people looked pretty left leaning.

Now of course that was tiny minority of workers there, but there seemed to be zero that's happy about it before acquisition so the "obvious reason" is "aside from cost cutting he's kicking people that would give resistance to whatever he wants to do with twitter"

can we please stop with this 'freedom of speech' bogeyman that Musk spouts? He cherry-picks what previously banned accounts get unbanned, he fires employees for making public tweets he doesn't like, as well as firing employees for making comments in company slack channels critical of his leadership - which is a notable departure from previous company policy.

Of course if employees don't believe in leaderships vision they might not be a good fit. Of course a company looking to cut costs is going to look at trimming their workforce. This all makes sense, it just has absolutely nothing to do with free speech.

Oh I don't believe that compulsive liar for a second, I'm just saying that it triggered some people once he started talking about maybe "moderating" (censoring by any other name) less of it

Twitter stock returned ~30% vs 190% for nasdaq in the same period... let's not pretend this company is even remotely close to being performant. I'd be far more inclined to believe "we rolled our own" engineering excellence stories from a massively profitable organization, rather than this confused-about-being-a-nonprofit company.

Also more broadly, people quitting en-masse with new leadership attempting to make the place profitable should tell you all you need to know about the culture.

> Also more broadly, people quitting en-masse with new leadership attempting to make the place profitable should tell you all you need to know about the culture

Trying to make the place profitable by firing large swaths of their coworkers. You make it sound like people started jumping overboard right when the rescue crew was on the way, rather than when a new captain took over and started trying to stop the ship from sinking by forcibly tossing people himself.

Elon is going far beyond "attempting to make the place profitable"

Well, twitter being badly managed company and musk being a wanker at same time is also pretty common sentiment. Just that musk fanboys are pretty loud.

> It's tragic that Musk is depleting whatever capital twitter had remaining on its current death march. Financially "profitable" or not, twitter did undeniably have social and political capital. Soon, it will have neither.

Is it tho ? The social capital Twitter had was just used to push ideas of whoever was in charge there at the time. It was slowly becoming a propaganda machine that was disguised as social network.

Just like a week ago we had HN discussion about how after firing a bunch of people Japanese twitter suddenly stopped being so political [1], coz those topics were being forced.

Twitter dying in fiery musky fireball might be the best thing to happen in long term.

* [1] https://www.forbes.com/sites/olliebarder/2022/11/14/japanese...

>It was slowly becoming a propaganda machine that was disguised as social network.

Is there a difference? From what we've seen over the past couple of decades, it seems like social networks are doomed to devolve into propaganda machines.

>Twitter dying in fiery musky fireball might be the best thing to happen in long term.

That's what I feel like too.

There is a difference between people using platform as propaganda machine and platform itself picking a side and deprioritizing anything that they don't like, especially with reach it has.

First one is de facto popularity contest and each side is free to call on other's bullshit, if control comes from company running it the detractors from "right" vision gets silenced,either explicitly, or by just modifying algorithm to deprioritize their content

> Certainly not “millions a day.” Where do people get that figure?

I suspect that $4m a day number Musk has been tossing around is rooted in his terrible financial investment. He purchased the company for $44b, which has something like $1.4b in interest every year? Which would be $3.8m a day.

So Twitter wasn't losing $4m a day--Musk was.

No, Musk signed for the loan, but as Twitters CEO. Twitter is on the hook, not him personally.

I think they got it from Elon shortly after he took over, turned everything into chaos, and advertisers started bailing. That being said, he also appears to be a pathological liar, so he could just be making it up on top of that.

But yes, this notion that Twitter was just hemorrhaging money seems flatly false and easily disprovable. I haven't read the financial statements in a while, but when I last did I indeed saw one of the few tech companies that was actually profitable.

>That being said, he also appears to be a pathological liar

Is there a such thing as a person who reaches that level of wealth who isn't? Perhaps people who were born with it might not be, but it seems to be a prerequisite for people who achieve that level of wealth themselves.

Buffett and Munger seem like genuinely good guys from the various talks and writings I’ve seen of theirs.

I guess there's always an exception.

I'm curious to know if anyone has accounted for losses from all the prior years? Those still need to be paid back/accounted for. Did they break-even?

Elon said it, and it was what they wanted to hear. Like most information on the internet.

I'd imagine by googling it and getting this:

https://www.statista.com/statistics/274563/annual-net-income...

https://www.businessofapps.com/data/twitter-statistics/

and see that revenue is growing but it's still in the red, and obvious conclusion to that being "they hired a lot of people that don't bring that much profit"

I've seen this sentiment elsewhere, but it doesn't match my reading of Twitter's financial statements: https://investor.twitterinc.com/financial-information/quarte...

In 2021, Twitter would have been profitable were it not for a ~$800 million legal settlement payout.

They posted a net profit in Q4 2021 and Q1 2022.

Twitter pre-Elon wasn't losing millions of dollars a day. Twitter post-Elon is losing millions of dollars a day because of the extra $1B/year in interest payments he took on because he wildly overpaid for the company right before everyone figured out just how badly Apple's new privacy practices affected the revenue of social media companies.

Elon losing money buying Twitter does not mean Twitter itself is losing more money.

Actually it does: he financed it like a PE looter, adding the debt to the target company. That gave Twitter an automatic $1-1.5 billion annual setback compared to where they had been.

https://www.bloomberg.com/opinion/articles/2022-04-21/elon-g...

The creditors must enjoy Elon talking about bankruptcy already. Maybe he thought he could stop the bleeding by firing everyone. But with advertisers out and revenue gone, he's set for an ugly legal battle in a few quarters. This has to be the most perilous business deal in the history of business and deals.

Yeah, I was expecting him to make a few cuts and focus on subscriptions or other revenue sources but I guess the losses he was looking at spurred a swing for the fences. I feel bad for anyone at Twitter who’s along for the ride.

The H1-B workers clinging on for dear life?

Yeah, that’s most of who I was thinking about along with anyone whose skills aren’t software developer-level portable. This kind of thing can be really disruptive to families if it forces a move.

It literally is. That's how every debt-financed corporate acquisition works. Twitter is paying this debt, not Elon from his pocket.

https://www.wsj.com/articles/elon-musks-buyout-will-load-twi...

So if it goes bankrupt what happens ? None of his assets aside Twitter gets seized ?

If Twitter fails to make payments on its debt then Morgan Stanley will become the proud new owner of Twitter. It is similar in structure to a mortgage on a house.

That seems like a really stupid loan to make then. If Twitter fails, it becomes mostly worthless, much like MySpace today. Why would a bank make such a loan? (It does seem like bankers are pretty stupid these days though, or just don't care because it's not their money.)

They set an interest rate in line with the risk that they are taking on. It seems like a pretty unlikely scenario where Twitter is worth nothing, if it goes bankrupt there can probably be a fairly sizable sale to recoup some value.

Allowing so long for the deal to close may have been a mistake due to what happened in the market between when they agreed to terms and when the deal closed.

He already paid 20B+ of his own money. Debt is only part of financing, AFAIK ~13B.

Excluding a settlement from 2014 that was paid this year, Twitter would have made 500mil on 5B revenue in 2021. They were also GAAP profitable in 2019.

Additionally, the incentive from wall street is to spend all your money to grow users. Whether that is right or wrong it’s the path they chose which led to users and revenue roughly doubling over 5 years.

https://s22.q4cdn.com/826641620/files/doc_financials/2021/ar...

https://s22.q4cdn.com/826641620/files/doc_financials/2019/Fi...

I think your argument reduces to "culture is better the more you spend on people" and "Twitter overspent on engineering people in order to create culture."

This is false. Twitter was profitable in 2017, 2018, 2019 and 2020 and its R&D budget was half that of 2022, or less, for those years and by all accounts it had a fantastic culture.

In 2021, the last year available and its very worst year since 2015, Twitter made $5 billion in revenue and lost $492 million. So your "millions of dollars a day" is not wrong-- $1.4 million per day.

Twitter spend $1.2 billion on R&D-- less than 25% of its revenue. In 2020, it spend $873 million on R&D and made a profit. In 2019, it spent a mere $682 million on R&D and made a $366 million dollar profit. Similarly in 2018.

The loss in 2021 was due to 765 million dollar lawsuit settlement. Also, after that loss was 221 million not 492. It would be 0.5B profitable if not that.

People on HN used to poke fun at unprofitable social media companies, and about how they're all declining. Its interesting to see from outside the political bubble how the conversations have now shifted to defending Twitters' income statement.

Sounds like it was a business problem, not an engineering or culture problem.