# Now that Elon Musk has bought Twitter - now the Pit edition (Part 1) **URL:** \ **Category:** The BBQ Pit\ **Created:** [April 25, 2022, 10:50pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442 "2022-04-25T22:50:17Z")\ **Posts on this page:** 20\ **Page:** 281
**Author:** ![Mr.E](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mr.e/32/8932_2.png) [@Mr.E](https://boards.straightdope.com/u/Mr.E)\ **Post date:** [July 14, 2023, 8:45pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/5606 "2023-07-14T20:45:49Z")
I’ll be surprised if anyone ever sees another check for so-called “content monetization.” The whole thing is hilariously opaque, nobody knew these checks were coming until they did, and nobody can explain why a given person got a given amount. Feels like a publicity stunt to “prove” that it’s real to the doubters and now since that’s done there’s no need to ever send money to anyone else. ---
**Author:** ![orcenio](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/orcenio/32/1036_2.png) [@orcenio](https://boards.straightdope.com/u/orcenio)\ **Post date:** [July 14, 2023, 9:02pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/5607 "2023-07-14T21:02:51Z")
Alright. I’m out. No more double dipping. Twitter can be Musk’s Truth Social. ---
**Author:** ![Smapti](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/smapti/32/17938_2.png) [@Smapti](https://boards.straightdope.com/u/Smapti)\ **Post date:** [July 14, 2023, 9:36pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/5608 "2023-07-14T21:36:03Z")
> [@orcenio](#): > > Twitter can be Musk’s Truth Social. [https://twitter.com/mithrasangel/status/1679932471780216832](https://twitter.com/mithrasangel/status/1679932471780216832) ---
**Author:** ![JohnT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/johnt/32/15048_2.png) [@JohnT](https://boards.straightdope.com/u/JohnT)\ **Post date:** [July 14, 2023, 10:07pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/5609 "2023-07-14T22:07:41Z")
> [@Sam\_Stone](#): > > Twitter was bleeding money before Musk took over. Literally, CAN YOU EVER STOP FUCKING LYING??? I responded to this falsity back in November with an analysis of Twitters own financials and here you are again, just spouting bullshit lie after bullshit lie. For fuck’s sake, Sam: you are just a liar. Lie, lie, lie, that is all you know and all you can do. Lie. > [@Now that Elon Musk has bought Twitter - now the Pit edition](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition/963442/1285): > > Let’s look at what sort of company Elon bought and see if what we’ve been told about Twitter matches reality. To do that, we’re going to review the basic financials in Twitter’s last 10k, published February 2022. Let’s start with their balance sheet: [[Imgur] ](https://www.flickr.com/photos/68782016@N08/52508783244/) I highlighted one line - cash and cash equivalents (we will see this again in the Statement of Cash Flows) - to show that Twitter wasn’t “running out of cash”. It had $2 billion, up from $1.8 billion the… For those of you who don’t wanna go through the numbers, Twitter was actually profitable in 2020 with the exception of a $1.1 billion provision for income taxes, also a $150 million in interest expense. But as far as operating profits were concerned, Twitter made money in 2020. As a matter of fact, for 3 years in a row (2019-2021), it added 200 million dollars to its cash reserves _each and every year_, which is not something that a nonprofitable company typically does. Let me quote myself: > [@JohnT](#): > > Also, in 2020, there is a $1 billion charge for the provision of income taxes. That one time charge… like the 2021 settlement… was the difference between an operations loss and break-even. In 2019 (top chart of these three), Twitter benefited from a $1 billion income tax provision, which was paid the next, so it looks as if they just deferred a tax payment for one year. Sam, your dishonesty is so rampant that if I were in charge of moderation, you would be banned for violating this board’s mission. ---
**Author:** ![JohnT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/johnt/32/15048_2.png) [@JohnT](https://boards.straightdope.com/u/JohnT)\ **Post date:** [July 14, 2023, 10:25pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/5610 "2023-07-14T22:25:27Z")
I would also like to note that Twitter’s _operating profits_ ranged from $630 million to $1.2 billion dollars for the 3 year period in question. So it sure as hell wasn’t _employee expense_ that forced the company in the arms of Elon - It was Musk offering $54/share for a company that had a book value of $9/share. ---
**Author:** ![JohnT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/johnt/32/15048_2.png) [@JohnT](https://boards.straightdope.com/u/JohnT)\ **Post date:** [July 14, 2023, 10:31pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/5611 "2023-07-14T22:31:50Z")
Sam, I see you typing: don’t bother replying. You are just a liar whom nobody here respects. If you told me here in the 103-degree San Antonio heat at 4pm in the afternoon that the Sun was shining, I would look out the window to verify. As would everyone of us reading these words. ---
**Author:** ![Atamasama](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/atamasama/32/12961_2.png) [@Atamasama](https://boards.straightdope.com/u/Atamasama)\ **Post date:** [July 14, 2023, 10:36pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/5612 "2023-07-14T22:36:18Z")
> [@JohnT](#): > > For those of you who don’t wanna go through the numbers, Twitter was actually profitable in 2020 with the exception of a $1.1 billion provision for income taxes, also a $150 million in interest expense. But as far as operating profits were concerned, Twitter made money in 2020. As a matter of fact, for 3 years in a row (2019-2021), it added 200 million dollars to its cash reserves _each and every year_, which is not something that a nonprofitable company typically does. I believe Sam was referencing the net profit/loss that Twitter experienced. Here’s a page with that info: > **[Twitter Revenue and Usage Statistics (2023)](https://www.businessofapps.com/data/twitter-statistics/)** > > Twitter is a real-time microblogging platform, publicly launched in July 2006. At launch, its defining features were the tight limits placed on each post, known at a tweet. Originally, users could only use 140 characters, although that has been... The only years cited without a net loss were 2018 and 2019. I’m interested in the annual revenue numbers though. Those have been on a steady increase, year after year, for an entire decade. Until the year Musk bought the company, then it had the first decrease in its history. ---
**Author:** ![JohnT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/johnt/32/15048_2.png) [@JohnT](https://boards.straightdope.com/u/JohnT)\ **Post date:** [July 14, 2023, 10:37pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/5613 "2023-07-14T22:37:46Z")
I cited these numbers. Sam keeps on saying that the employee expense made Twitter unprofitable when Twitters own financials put paid to that nonsense. Twitter only lost money in 2021 because of a one-time litigation expense of $700 million, otherwise it would have been profitable to the tune of $500 million. It “lost” money in 2020 because it deferred a $1.1 billion tax payment in 2019 (which shows a $1.4 billion profit). In short, and to repeat myself, Twitter only lost money those years because of a deferred tax payment which came due in 2020 and a lost lawsuit in 2021. It was otherwise profitable all three years, especially in operations. ---
**Author:** ![Atamasama](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/atamasama/32/12961_2.png) [@Atamasama](https://boards.straightdope.com/u/Atamasama)\ **Post date:** [July 14, 2023, 10:40pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/5614 "2023-07-14T22:40:30Z")
> [@JohnT](#): > > Sam keeps on saying that the employee expense made Twitter unprofitable when Twitters own financials put paid to that nonsense. Fair enough, and I called bullshit on that idea as well. ---
**Author:** ![digs](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/digs/32/14889_2.png) [@digs](https://boards.straightdope.com/u/digs)\ **Post date:** [July 14, 2023, 10:47pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/5615 "2023-07-14T22:47:00Z")
Look, we all know why Sam’s bending every number he can find: he hasn’t met a Cocky Alpha Male that he hasn’t fallen in thrall to. So, just like he’s done with Donnie, he cannot let himself admit even a suspicion of weakness on the part of his hero. Well, here, I’ll let him explain why he’s so emotional about Twitter’s earnings: > [@Sam\_Stone](#): > > Saying, “Twitter was profitable before the pandemic” is misleading and cherry picking. It’s also meant to imply that _Musk’s changes made it unprofitable_, which would not be true. . I feel a little bad when I see people spending hours of research refuting his arguing points (Sympathizing with you, John). It’s not like Sam’s going to say “Golly, I took an objective look at the evidence and I’ve actually learned something!” You do know you can just ignore him and not get your undies twisted… ---
**Author:** ![Sam\_Stone](https://avatars.discourse-cdn.com/v4/letter/s/ecccb3/32.png) [@Sam\_Stone](https://boards.straightdope.com/u/Sam_Stone)\ **Post date:** [July 14, 2023, 10:52pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/5616 "2023-07-14T22:52:19Z")
> [@JohnT](#): > > Literally, CAN YOU EVER STOP FUCKING LYING??? > > I responded to this falsity back in November with an analysis of Twitters own financials and here you are again, just spouting bullshit lie after bullshit lie. > > For fuck’s sake, Sam: you are just a liar. Lie, lie, lie, that is all you know and all you can do. What the hell are you on? You just qualified Twitter’s LOSSES by taking out interest and tax payments? And you call me a liar for providing a strasightforward reading of their finances? From here: [Is Twitter Profitable?](https://businessmodelanalyst.com/is-twitter-profitable/#:~:text=Financial%20Performance%20of%20Twitter,-Twitter%27s%20total%20revenue&text=In%20the%20second%20quarter%20of,billion%20dollars%20(%24221.41%20million)). > [@](#): > > **Is Twitter Profitable?** No, [Twitter](https://businessmodelanalyst.com/twitter-business-model) is currently not profitable. The company last reported a profit in 2019, when it generated about $1.4 billion in net income; it had generated $1.2 billion the year prior but has since returned to non-profitability (a trend it had maintained from 2010 to 2017, according to Statista. You called me a liar for saying that Twitter was bleeding money before Musk took over. In 2021 and 2022 Twitter had big losses, then Musk took it over. It’s still losing money. This is pathetic. > [@](#): > > ### Has Twitter Ever Been Profitable? > > Despite its widespread popularity and influence, Twitter has only recently become profitable, and soon afterward, it went back to reporting losses. In fact, Twitter only became profitable for the first time in 2018 when it reported its first-ever net income of $1.2 billion for that year. This was followed by a second consecutive year of profitability in 2019, with total revenue of $3.4 billion and a net income of $1.4 billion, which was higher than expected by many analysts. > > … > > Twitter’s total revenue in 2022 was $4.4 billion, a 12% decrease from 2021. Advertising drove the majority of this figure with $4 billion, followed by data licensing and other revenue, which added up to $0.4 billion. In the second quarter of 2022, costs and expenses rose 31% year-over-year to $1.52 billion, resulting in an operating loss of $344 million (an operating margin of -29%). In 2021, Twitter’s net loss amounted to just under a quarter of a billion dollars ($221.41 million). These are the same numbers I’ve been using, and they are \*everywhere. They are the standard kinds of numbers used to evaluate any corporation. You, on the other hand, seem to be trying to parse your way through the numbers until you can exlude enough to change the result and call me a ‘liar’. There is a statistica link earlier in the thread that shows exactly what happened at Twitter, and it shows exactly what I’ve been saying - that Twitter was losing money when Musk took it over. And here’s the FY2021 press release from Twitter describing their financials: > [@](#): > > - 2021 revenue was $5.08 billion, an increase of 37% year over year. > - 2021 operating loss of $493 million, or an operating margin of -10%, includes a one-time litigation-related net charge of $766 million1, as well as ongoing investments. > - 2021 adjusted operating income, which excludes the one-time litigation-related net charge, was $273 millionreflecting an adjusted operating margin of 5%. Operating income was $27 million in 2020, which includes a $150 million non-recurring expense related to an ongoing FTC matter in Q2 of 2020, representing an operating margin of 1%. > > - 2021 net loss was $221 million, representing a net margin of -4% and diluted EPS of ($0.28). > - 2020 net loss of $1.14 billion includes a deferred tax asset valuation allowance of $1.10 billion and corresponding non-cash income tax expense based primarily on cumulative taxable losses driven primarily by COVID-19, representing a net margin of -31% and diluted EPS of ($1.44). These are the numbers I have been using. Net losses are the measure. ---
**Author:** ![digs](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/digs/32/14889_2.png) [@digs](https://boards.straightdope.com/u/digs)\ **Post date:** [July 14, 2023, 10:58pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/5617 "2023-07-14T22:58:48Z")
In the previous post, I wondered if I was overstating the point that Sam’s emotional about these numbers. I needn’t have done so. ---
**Author:** ![SuntanLotion](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/suntanlotion/32/16165_2.png) [@SuntanLotion](https://boards.straightdope.com/u/SuntanLotion)\ **Post date:** [July 14, 2023, 11:10pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/5618 "2023-07-14T23:10:41Z")
Wondering what strasightforward means. ---
**Author:** ![Smapti](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/smapti/32/17938_2.png) [@Smapti](https://boards.straightdope.com/u/Smapti)\ **Post date:** [July 14, 2023, 11:46pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/5619 "2023-07-14T23:46:43Z")
Twitter rep confirms that only the people Elmo is simping for get ad sharing. > > > @rob-sheridan.com on BSky @rob\_sheridan ---
**Author:** ![Maserschmidt](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/maserschmidt/32/18829_2.png) [@Maserschmidt](https://boards.straightdope.com/u/Maserschmidt)\ **Post date:** [July 15, 2023, 12:15am UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/5620 "2023-07-15T00:15:20Z")
Well, I have no doubt that that response did indeed “clarify” his/her concerns. ---
**Author:** ![Sam\_Stone](https://avatars.discourse-cdn.com/v4/letter/s/ecccb3/32.png) [@Sam\_Stone](https://boards.straightdope.com/u/Sam_Stone)\ **Post date:** [July 15, 2023, 1:06am UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/5621 "2023-07-15T01:06:00Z")
> [@JohnT](#): > > For those of you who don’t wanna go through the numbers, Twitter was actually profitable in 2020 with the exception of a $1.1 billion provision for income taxes, also a $150 million in interest expense. Why would you remove their interest expenses and tax liability for 2020? Here’s Twitter’s income sttement from 2018 to 2021: > **[Twitter Inc (Delisted) (TWTR) Income Statement](https://www.investing.com/equities/twitter-inc-income-statement)** > > The Income Statement (earnings report) for Twitter Inc (Delisted). Find the company's financial performance, revenue, and more. In 2021 Twitter had a net loss of 441 million before taxes, and 211 million after the tax adjustment. In 2020 Twitter had a net loss of 51 million before taxes, and 1135 million after their tax adjustment. Either way, they lost money. It’s right there in the income statement. > [@](#): > > But as far as operating profits were concerned, Twitter made money in 2020. As a matter of fact, for 3 years in a row (2019-2021), it added 200 million dollars to its cash reserves _each and every year_, which is not something that a nonprofitable company typically does. Nice switch to ‘operating profit’ rather than net profit. And whether a company adds cash or not is irrelevant, since there are lots of ways to accrue cash while losing money. For instance, by accruing future debt or liabilities, or holding money that eventually will be used to pay tax, or by selling assets. For example, in 2021 Twitter sold off $101 million in assets. I assume you are talking about the ‘provision for income taxes’ in 2020, which changes the net income from a small loss to a large one. I’m not an accountant, but isn’t that provision basically saying, “Yeah, we made this amount of money, but we ower this much in tax, so that needs to be deducted.” From here: > **[What is a provision for income tax and how do you calculate it?](https://tax.thomsonreuters.com/blog/tax-provision-how-to-calculate-it/)** > > Tax provision is the estimated amount of income tax that a company is legally expected to pay the current year. > [@](#): > > What is a tax provision? A tax provision is the estimated amount of income tax that a company is legally expected to pay to the IRS for the current year. It is just one type of provision that corporate finance departments set aside to cover a probable future expense. Other types of provisions a business typically accounts for include bad debts, depreciation, product warranties, pensions, and sales allowances. > > Tax provisions are considered current tax liabilities for the purpose of accounting because they are amounts earmarked for taxes to be paid in the current year. So if the company accrued tax liabilities, why should we exclude them? And in any event, when talking about corporate profits and losses, the standard is to compare NET operating profits and losses. You’re the one trying to massage the data to make a point. I’m just following the normal convention. If I tried to show that Musk was doing okay by showing revenue and taking out the tax liability and interest expenses, you’d call me a liar. ---
**Author:** ![Dissonance](https://avatars.discourse-cdn.com/v4/letter/d/85f322/32.png) [@Dissonance](https://boards.straightdope.com/u/Dissonance)\ **Post date:** [July 15, 2023, 1:20am UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/5622 "2023-07-15T01:20:11Z")
Indeed, nothing like having it clarified that you aren’t one of “a select group of people.” Agile business model? The actions of a business genius? You decide. ---
**Author:** ![Mr.E](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mr.e/32/8932_2.png) [@Mr.E](https://boards.straightdope.com/u/Mr.E)\ **Post date:** [July 15, 2023, 1:51am UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/5623 "2023-07-15T01:51:56Z")
The fun part about arguing about Twitter’s financial situation before and after Musk is it’s all moot. Was Twitter doing great before Musk bought it? Not really, but trucking along with garbage financials is hardly unusual for big tech companies, and Twitter was closer to breaking even than many other companies. Twitter wasn’t in any danger of closing its doors and Musk was only able to muscle in and take over thanks to his ludicrously overpriced bid. Will Twitter do better under Musk’s leadership? It’s a private company now so we’ll probably never know for sure. Musk is under no obligation to disclose Twitter’s financials, but lately he sure seems to favor bizarre metrics like “unregretted app seconds” over anything that can be objectively evaluated. Despite that, just based on what we know of Twitter’s pre-Musk profitability and the massive debt imposed on the company thanks to Musk’s buyout it will take a miracle to make Twitter profitable enough to keep it from going bankrupt now. ---
**Author:** ![wguy123](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wguy123/32/3161_2.png) [@wguy123](https://boards.straightdope.com/u/wguy123)\ **Post date:** [July 15, 2023, 2:26am UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/5624 "2023-07-15T02:26:30Z")
> [@Sam\_Stone](#): > > Overall, by the time Twitter was purchased by Musk it was still overall in net loss territory. It was easily the worst-managed of the big tech companies. So…super smart time to buy? Or…super stupid time to buy? ---
**Author:** ![EddyTeddyFreddy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/eddyteddyfreddy/32/18796_2.png) [@EddyTeddyFreddy](https://boards.straightdope.com/u/EddyTeddyFreddy)\ **Post date:** [July 15, 2023, 2:29am UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/5625 "2023-07-15T02:29:36Z")
Depends a lot on the price paid, amirite? [Previous page](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442.md?page=280) [Next page](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442.md?page=282)