this post was submitted on 25 Jul 2023
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What does it mean for Twitter to take out a loan to buy itself?
It means Musk & co only paid $31 billion, and only paid tax on $31 billion, while Twitter gets saddled with $13 billion in debt.
$44 billion was required to buy Twitter and pay off existing shareholders. The argument is that under the new ownership the new owners would be able to direct Twitter to take out a loan to further the business, however in practice they avoid tax and saddle the business with debt that it can't afford.
It's the same thing that happened to Toy's R Us, a group of investors bought the company using the same sort of deal, then they couldn't pay it back and poof, no more Toy's R Us.