• @Buffalox
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    1 year ago

    OK here’s some simple calculations.

    Twitter was worth around $22 billion, when Elon bought it at $44 billion, but to help pay for it, half of that is borrowed by Twitter to pay for itself! Yes you can do that.😋

    So now the company is worth about $22 bil less, because it has new debt.

    In my book 22-22 = 0 = zero = nul = naught = zip

    On top of that, the original value has declined dramatically, with about 60% decline in revenue that we know of. So the internal value is actually way below 0, but a limited company cannot be worth less than 0, so it remains 0.

    The company is insolvent, which means it’s basically bankrupt, except it’s not declared yet. The only possible slight value it may have left, is for tax deductions on the losses.

    • @[email protected]
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      21 year ago

      Worthless =/= insolvent.

      The value is determined based on a shareholder valuation, insolvent means having a negative cashflow and depleted reserves.

      You can technically run a stock absolutely into the ground if everyone would place sell orders at market (i.e. without limit) and the only buyers would offer 1 cent.

      That changes nothing about the profitability of the company though.

      And while this is a very hypothetical scenario for a listed company, for an unlisted one you can freely adjust your list price. If he were to sell 1% for $1 to his neighbor, the company valuation would be down to 100 bucks.

      • @Buffalox
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        11 year ago

        Since it’s not a stock company, the valuation is speculative.

        But the company being insolvent, and running on a deficit without prospective og turning a profit. Would by normal measures render the company worthless, except if there is a tax benefit to take over.

        Musk can value it at whatever he wants, I strongly doubt he will find a buyer at any price.