Musk informed banks that he would develop new ways to monetize tweets and could cut Twitter pay
According to three people familiar with the matter, Elon Musk told banks that agreed to help fund his $44 billion acquisition of Twitter Inc that he could cut executive and board pay at the social media company in an effort to cut costs, and that he would develop new ways to monetize tweets.
Musk had to persuade the banks that Twitter generated enough cash flow to service the debt he was seeking. In the end, he was able to secure $13 billion in loans secured against Twitter, as well as a $12.5 billion margin loan tied to his Tesla stock. He agreed to pay the balance of the consideration with his own money.
According to the sources, Musk made the pitch to lenders as he attempted to secure debt for the buyout days after submitting his offer to Twitter on April 14. On April 21, his submission of bank commitments was critical in Twitter’s board accepting his “best and final” offer.
According to the sources, Musk’s pitch to banks was more about his vision than firm commitments, and the exact cost cuts he will pursue once he owns Twitter are unknown. According to the sources, the plan he outlined to banks was lacking in detail.
Twitter’s gross margin is significantly lower than that of competitors such as Meta Platform Inc’s Facebook and Pinterest.
According to sources, Musk will not make job-cut decisions until he takes over the company later this year. He also told banks that he intends to create features to increase business revenue, such as new ways to monetize tweets that contain important information or go viral.
