HomeTechnology & InnovationTwitter auction proceeds pale compared to debt obligations
By Economy Middle East
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January 19, 2023 11:34 am

Twitter auction proceeds pale compared to debt obligations

Is the platform facing bankruptcy?
Twitter auction
Twitter

An auction for hundreds of items has just concluded at Twitter’s San Francisco headquarters. The platform’s famous blue bird logo, which is the most expensive item, sold for $100,000. According to experts, the proceeds from the auction are unlikely to make a dent in Twitter’s financial obligations.

The sale comes as Twitter owner Elon Musk reduces costs following his $44 billion purchase of the company last year.

The bill for Musk’s purchase of Twitter is due, and the billionaire is facing unpalatable options on the company’s massive debt pile, ranging from bankruptcy to another costly sale of Tesla shares.

According to three people close to the entrepreneur’s acquisition of Twitter, the first installment of interest payments on the $13 billion in debt he used to fund the takeover could be due as early as the end of January. Because of this debt, the company must pay approximately $1.5 billion in annual interest payments.

The Tesla and SpaceX CEO secured a $44 billion debt from a syndicate of banks led by Morgan Stanley, Bank of America, Barclays, and Mitsubishi to finance his $44 billion deal to take Twitter private in October. Twitter holds the $13 billion debt on a corporate level, with no personal guarantee from Musk.

Read more: Elon Musk kicks off mass Twitter layoffs

Musk has laid off roughly half of the company’s 7,500 employees since taking over in late October.

He has also discontinued many Twitter perks, such as free meals.

The auction’s administrator, Heritage Global Partners, did not publish the final results, but the BBC obtained several prices just before the auction closed.

A 190cm (6ft) planter shaped like a @ symbol cost around $15,000.

A custom reclaimed wood conference room table sold for around $10,500.

Additionally, Twitter sold from its former coffee bar a high-end La Marzocco Strada 3 espresso machine, which retails for $30,000, for around $13,500.

Polycom conference call speaker phones were selling for around $300 on the low end.

However, according to online viewers, some of the used items were selling for more than the retail price, including an $1195 molded plywood Eames chair from designer Herman Miller, which went for at least $1400.

Drop in revenues

 

In November, Musk tweeted that the company had experienced a “massive drop in revenues” due to the departure of several advertisers.

He also warned that the platform might go bankrupt.

Furthermore, Twitter is accused of failing to pay rent at offices around the world, including their headquarters in San Francisco, where their landlord is suing for nonpayment.

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