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Business Elon Musk Social Media

Musk Tells Employees Twitter’s Economic Picture Is ‘Dire’ And The Site May Go Under

Though he’s owned Twitter for a little over two weeks, Elon Musk is already warning that the social media site has a “dire” economic picture and may not survive the economic downturn that is threatening to leave the company bankrupt, CNBC reports.

In an email Musk sent to the employees he hasn’t already fired, he writes:

Frankly, the economic picture ahead is dire especially for a company like ours that is so dependent on advertising in a challenging economic climate. Moreover, 70% of our advertising is brand, rather than specific performance, which makes us doubly vulnerable! 

The introduction leads to a mention of pushing subscriptions as a way to save the site from collapse, though it remains to be seen if enough Twitter users would be willing to pay a monthly fee to have a “verified” account.

That is why the priority over the past ten days has been to develop and launch Twitter Blue Verified subscriptions (huge props to the team!). 

Without significant subscription revenue, there is a good chance Twitter will not survive the upcoming economic downturn. We need roughly half of our revenue to be subscription.

Just how serious is the financial picture at Twitter, which Musk paid $44 billion to acquire? The New York Times has reported on the deal, which was done with heavy financial leverage and a massive debt load.

To finance his Twitter deal, he loaded the company with $13 billion in debt, putting it on the hook to pay more than $1 billion annually in interest alone.

But last year Twitter had less than $1 billion in cash flow, partly because of a one-time charge, meaning it generated less money than what it now owes its lenders annually. The company was also unprofitable for eight of the last 10 years. So, to make ends meet, Mr. Musk must boost Twitter’s revenue or cut costs — or do both.

Musk is also losing a fortune on his other business, Tesla Motors, CNN reports, noting that shares of the company have taken a major hit since Musk announced he was cutting the price of his cars in China.

Tesla has cut starting prices for its Model 3 and Model Y cars by as much as 9% in China, reversing a trend of increases across the industry amid signs of softening demand in the world’s largest auto market.

The price cuts, posted in listings on the electric vehicle giant’s China website on Monday, are the first by Tesla in China in 2022, and come after Tesla began offering limited incentives to buyers who opted for Tesla’s insurance last month.

Shares of Tesla (TSLA) fell nearly 4% in US premarket trading on the report about lower prices for its cars in China. Shares are down 40% so far this year through Friday’s close.

Sounds like Elon Musk is about as good of a “businessman” as failed, one-term former president Donald Trump.

 

Categories
Business Crime Donald Trump

Judge In Tax Fraud Case Appoints ‘Independent Monitor’ To Oversee Trump’s Finances

A New York judge ruled Thursday that an “independent monitor” will be appointed by the court to oversee the finances of former president Donald Trump and the Trump Organization during the tax fraud trial brought by New York Attorney General Letitia James.

According to Josh Gerstein of Politico, the ruling is a big loss for the failed former president and his company, which is already facing financial uncertainty and multiple investigations.

New York Supreme Court Justice Arthur Engoron issued an order after a daylong hearing, requiring that the Trump Organization’s dealings with banks and sale of major assets be subject to supervision by a third party expert to be named by the court.

One provision in the order requires 14 days notice to the court before Trump can dispose of any “non-cash asset” listed in a financial statement his firm prepared last year.

The judge’s order came over strenuous objections from Trump’s lawyers in Manhattan earlier Thursday, where Trump’s team pleaded with Engoron to reject Attorney General Tish James’ bid to impose potentially far-reaching supervision of Trump’s business empire as litigation proceeds over her claims that the firms engaged in vast bank and insurance fraud in real estate transactions.

After Judge Engoron issued the ruling, James praised the decision:

“Time and time again, the courts have ruled that Donald Trump cannot evade the law for personal gain,” she said in a statement. “Today’s decision will ensure that Donald Trump and his companies cannot continue the extensive fraud that we uncovered and will require the appointment of an independent monitor to oversee compliance at the Trump Organization.”

The judge also noted that while he believes the government has to meet a “heavy burden” to warrant the appointment of a financial monitor, all he has heard so far in the way of a defense from Trump’s attorneys is “little more than hot air.”

“Let’s be real here …They submitted all these documents,” the judge said to a lawyer for Trump, Christopher Kise. “What kind of evidence do you want? This is a motion for preliminary injunction.”

Kise suggested that such a move would be tantamount to placing the Trump Organization into receivership, arguing “It’s really more in the nature of seizing control of a successful corporation and interfering on a day-to-day basis with its financial arrangements.”

But Judge Engoron dismissed Kise’s argument by remarking:

“Your papers kept using the word receiver. … They’re not asking for one and that’s very different from a monitor. True or false?”

Kise also accused AG James of trying to make headlines in the midst of a midterm election, which will be held next Tuesday.

“We’re a few days out from an election. I’m hoping that’s not behind the motivation and the timing here, but I’m candidly a little bit cynical about it. … I hesitated to bring it up, but this really shouldn’t be about political theater.”

What Kise failed to add, however, is that Trump isn’t on the the ballot in any of the 50 states and is subject to the same laws as every other American.

Categories
Business Donald Trump Social Media

Stock Price Of Trump’s ‘Truth Social’ Site Plummets After Kanye West Moves To Buy Parler

While disgraced former president Donald Trump may pretend to be friends with rapper Kanye West, a move West made to buy the right-wing Parler social media site has negatively impacted the stock price of Trump’s Truth Social site.

Forbes reports that in Monday trading, Trump’s company lost a full 8% of its share price.

Shares of Digital World Acquisition Corp. (DWAC), the special purpose acquisition company with turbulent plans to merge with Truth Social’s parent Trump Media and Technology Group, fell 8% to $16.11 Monday as a new brash billionaire threw his hat into the conservative social media ring.

Even worse for Trump is the fact that shares of DWAC are down 70% so far this year as Elon Musk begins to make rumblings about going through with his plans to acquire Twitter, a promise Musk has previously made and then backed away from.

West was booted from Twitter and Instagram for anti-Semitic comments in which he suggested that he was planning to carry out violence against Jews, with The Washington Post reporting:

His account, @kanyewest, was “locked for violating Twitter’s policies,” a Twitter spokesperson said in an email Sunday, declining to state which policy he had violated. The account shows that a recent tweet violated Twitter rules.

Though the tweet is no longer visible on his account, screenshots shared widely on social media show that Ye had said he would go “death con 3” on “JEWISH PEOPLE,” an apparent reference to Defcon, the U.S. military defense readiness system. In the tweet, he used antisemitic tropes and said he could not be antisemitic “because black people are actually Jew also.”

A spokesperson for Meta, the parent company of Instagram formerly known as Facebook, said in an email that the platform “deleted content from @kanyewest for violating our policies and placed a restriction on the account. We may place restrictions on accounts that repeatedly break our rules, for example, we may temporarily restrict them from posting, commenting, or sending DMs.” Screenshots of the post show that Ye had posted an apparent conversation with the rapper Diddy, employing antisemitic tropes to allege that he was being influenced by Jewish people.

For months how, there have been reports that the inability of Trump and others to raise additional capital to keep Truth Social afloat will lead to a financial collapse before the end of 2022.

Categories
Business Donald Trump Social Media

Investors Dump Trump’s Truth Social Site And Withdraw Millions As Company Nears Collapse

Failed, one-term, twice-impeached former president Donald Trump’s fledgling social media site, Truth Social, appears to be headed for a quick demise, much like nearly every business venture the Donald has attempted over the course of his life.

According to Reuters, major investors are now withdrawing millions of dollars in financing.

Some investors are backing out of Digital World Acquisition Corp’s (DWAC.O) plan to acquire former U.S. President Donald Trump’s social media firm Truth Social, the blank-check firm said on Friday.

Digital World said it had received termination notices from private investment in public equity (PIPE) investors ending nearly $139 million in investments out of the $1 billion commitment it had previously announced.

That move by some investors could lead to a complete collapse of the deal, which would mean Truth Social no longer has any operating capital. That would lead to the death of the site.

More investors could pull out in the next few weeks, sources said, as they can terminate anytime after the deadline. Many are waiting for DWAC to propose more preferred terms to PIPE investors, sources added.

Truth Social was created by Trump because he remains permanently banned from both Twitter and Facebook. The plan was to serve as an alternative to those sites, but Truth Social has suffered numerous setbacks since it first launched in February.

The biggest problem for Truth Social, however, has been a lack of interest by potential users. So far, the site only has approximately 550,000 active daily users. In contrast, Twitter has 217 million.

Just last month, it was reported that Truth Social was unable to pay its bills, including for the server which hosts the site:

There are signs that the company’s financial base has begun to erode. The Trump company stopped paying RightForge, a conservative web-hosting service, in March and now owes it more than $1 million, according to Fox Business, which first reported the dispute.

The company also has struggled with some basics of corporate operation. The U.S. Patent and Trademark Office this month denied its application to trademark “Truth Social,” citing the “likelihood of confusion” to other similarly named companies, including an app, “VERO — True Social,” first released in 2015.

 

Categories
Business Donald Trump Social Media

Trump’s Social Media Site Is On The Verge Of Complete Financial Collapse

Less than year since it was founded and went into operation, Donald Trump’s social mediate site, Truth Social, is unable to pay its bills and on the verge of financial collapse.

The Washington Post reports that Truth Social has no reliable source of income, which is likely to doom it:

Six months after its high-profile launch, the site — a clone of Twitter, which banned Trump after Jan. 6, 2021 — still has no guaranteed source of revenue and a questionable path to growth, according to Securities and Exchange Commission filings from Digital World Acquisition, the company planning to take Trump’s start-up, the Trump Media & Technology Group, public.

The company warned this week that its business could be damaged if Trump “becomes less popular or there are further controversies that damage his credibility.” The company has seen its stock price plunge nearly 75 percent since its March peak and reported in a filing last week that it had lost $6.5 million in the first half of the year.

How bad are things at Truth Social? The site is on the verge of lacking a hosting service, which would render it unable to appear on the web:

There are signs that the company’s financial base has begun to erode. The Trump company stopped paying RightForge, a conservative web-hosting service, in March and now owes it more than $1 million, according to Fox Business, which first reported the dispute.

The company has also been unable to trademark its entity name, which means anyone can start up at similar site and name it the very same thing, which would further erode efforts to build a loyal audience:

The U.S. Patent and Trademark Office this month denied its application to trademark “Truth Social,” citing the “likelihood of confusion” to other similarly named companies, including an app, “VERO — True Social,” first released in 2015.

Usage is also fading, especially since the FBI raid on Mar-a-Lago, with its views plummeting to about 300,000 a day, down from 1.5 million on the day of its launch.

Looks like the “great businessman” is about to destroy yet another company.