The fact of Musk talking about taking over was enough to scare off a bunch of advertisers.

And the acquisition itself is the source of the massive new debt.

So, then, once the acquisition went through, the situation was definitely dire.

Was it because of Musks leadership or was it because we're going into recession so companies are cutting costs and saw a cheap way to get free advertising while getting on the good side with media? Companies have no issue running under dictatorship, paying bribes, breaking environmental laws, hiding women/hbtq in ads, but Twitter under Musk, thats the limit.

I don't think it was a morals issue. The rumours were that Musk wanted to turn Twitter into an (even more) unmoderated hate speech cesspool and drive off most of the (wealthy) userbase. Under that possibility advertisers were wise to wait and see instead of buying slots early (even if then they lost the usual discount).

That didn't happen, and Twitter is now about as terrible as it's ever been, so they're coming back.

> Their finances were never that dire; they were profitable in 2018 and 2019.

The finances of a succesful/healthy company aren't usually decribed as 'not being that dire' to be fair.

Ten years of operation and still unprofitable isn't great.

They lost 2019s profits in 2020, and had a mildly unprofitable 2021. That isn’t unusual.

It’s likely more dire now, not less. From all accounts, the savings from staff cuts have been met with lost advertising revenue, Twitter Blue hasn’t made a dent, and they’ve got big interest payments to meet.

It seems like they are on a better track to profitability if their revenue rebounds a bit - i.e. if they get up to 80% of their previous revenue they will be operating that level of revenue with underlying profitably rather than operating unprofitably at their previously larger revenue figure.

IMO Twitter Blue wasn't as much about making a load of money, as it was Musk sticking a stake in the ground and saying 'We are going to change things fast and experiment with things - and I don't want sacred cows'.

> if they get up to 80% of their previous revenue

Again with the giant ifs.

> It seems like they are on a better track to profitability if their revenue rebounds a bit - i.e. if they get up to 80% of their previous revenue they will be operating that level of revenue with underlying profitably rather than operating unprofitably at their previously larger revenue figure.

No they won't, because there are an additional ~1.5 billion the company has to pay in interest, as a result of the takeover. Twitter has fluctuated around profitability the last few years, now they have an albatross in interest payments around their neck. The only way Musk can lead them to a "better track to profitability" is if he unlocks significantly more revenue. He's been going in the opposite direction so far.

To be fair the lost ad revenue came before the layoffs. The rumours of the Musk takeover were enough to scare off many of the early ad space buyers.

it's a huge if, but this still doesn't make a case avout whether Twitter needed to be the size it was. the two are wholly unconnected.

> they were profitable in 2018 and 2019.

Technically also profitable in 2021 - without the $800M lawsuit settlement, they'd have made $580M profit instead of $220M loss.