Why It’s Tough to Assess the True State of Musk’s Twitter

Some companies that go private disappear from public view. Not Twitter. It’s hard to think of another corporate takeover whose aftermath has drawn so much media attention, with so many details leaking out. And that has surely complicated Elon Musk’s life by, for instance, scaring away advertisers and possibly making it harder to recruit employees. Even so, Musk’s view that it would be easier to restructure Twitter as a private firm—expressed in an April text to Twitter’s then chair, Bret Taylor—was still probably right.

After all, while we’ve heard a lot about the untrammeled nature of Musk’s management style, we know little about what’s most important—the state of Twitter’s business, such as its current level of revenue, expenses and debt levels. Yes, Musk borrowed $13 billion in debt that carried very high interest rates. It’s possible, though, that he will use his latest sale of Tesla stock this week, raising somewhere around $3.5 billion, to pay some of that off. That’s one interpretation of his Wednesday tweet: “At risk of stating obvious, beware of debt in turbulent macroeconomic conditions, especially when Fed keeps raising rates.” The bottom line is that without knowing the key financial details, we can’t really assess the state of play.