29.4 billion dollars was the market cap of Twitter before Elon Musk
14.9 billion was the market cap five years earlier.

Twitter before the Elon Musk surge had a 95% increase in valuation over a period of five years.

Which comparing that with earnings, Twitter looks like this.

Revenue

2016-2.5 billion
2021-5 billion

A 100% growth

Profit

2016-Negative 457 million
2021-Negative 221 million

In both cases this sounds bad, but it should be mentioned this was due to changes in Twitter, where the company profited 1.4 billion in 2019.

Daily active users

2017-110 million
2022-229 million

Twitter actually has in revenue, profit and users been properly valued five years ago to today.

The issue though is Elon Musk buying the company was trying to get it for 44 billion dollars, which is 52% higher over the current valuation.

To finance it, Elon Musk was hoping to get investors, which offered to cover 25% of it, but he’d still need to pay for the other 75%. Plus, it was unclear what the terms of the investors for that 25% were and if it was just a handshake deal or not.

To fund it, he’d need to get a loan of 30 billion dollars on his Tesla stock, which when he agreed to do the deal was only 10% of his net worth.

Which since April, Tesla has lost 25% of its market cap.

Something I believe will go down way more, due to other companies making electric cars and Tesla about to witness a similar issue Netflix had with Disney+, HBO Max, Paramount+ and more all releasing in the last two years.

Elon Musk also currently owns 17% of Tesla.

If the market cap were 50%, which looking at the tech bubble with companies such as Amazon or Microsoft, it’s totally realistic, Elon Musk would be on the hook for buying Twitter and the 30-40 billion he bought it for could end up costing him close to half his equity in Tesla.

It could also potentially get him in a spot, where the people doing the loan on the equity end up the largest or one of the largest Tesla shareholders.

That’s probably why this deal never happened and Elon Musk spent a month of theater for excuses to get out of it.

My real feeling is he never wanted to pay for more than 20% of this deal and thought larger investors would beg him for a chance to be apart of it, but just nobody was excited for Twitter.

Which is sad, because despite problems, it before this was a pretty well valued company, where I think a lot of shareholders are about to see a crash over Elon Musk amusement.