This is one of these posts where I have no clue where to begin because there is so much to cover. Let’s start with the fact that Twitter’s credit rating has been withdrawn by S&P:
The rating firm, which is among the top in the US, said the action was “due to a lack of sufficient information to maintain the rating” in a release on Friday. At the time of the withdrawal, both Twitter and its debt were on “CreditWatch,” suggesting an imminent rating action.
Twitter’s massive about $13 billion debt load was funded directly by banks led by Morgan Stanley when Musk’s $44 billion acquisition of the social media giant closed. Since then, Musk’s takeover of Twitter has brought sweeping changes to the company’s operations and product. Those changes included mass layoffs, changes in features and a raft of companies pulling advertising dollars from the platform.
The group of banks that funded the buyout now face the challenge of syndicating the debt to investors, many of whom use rating companies to determine the risk involved in buying credit.
S&P downgraded the company five notches to B- from BB+ on Nov. 1 as a result of its high leverage post-acquisition. The rating firm expected to “obtain more information regarding the final capital structure and any potential changes to the operating strategy,” according to the November research update.
That’s going to be a problem if Elon Musk needs more money to keep Twitter afloat seeing as it’s not coming in from advertising. I would not be surprised if he sells more Tesla shares in the weeks to come. Which of course will send that stock into free fall the second he does.
Next up is this District Attorney who has quit Twitter because of these reasons:
Santa Clara County District Attorney Jeff Rosen will deactivate his Office’s Twitter account, citing the explosion of hate speech on the popular communications platform.
DA Rosen’s decision to remove Northern California’s largest prosecutor’s office from Twitter follows increasing hatred, bigotry and antisemitism on the platform and Twitter owner Elon Musk’s own statements and posts, such as a meme used by racists and antisemites.
DA Rosen is respectfully asking all elected District Attorneys throughout the United States to take their Offices off Twitter.
Ouch. But he’s pointing out what everybody knows. Hate speech has massively increased since Elon took over Twitter and his reality distortion field does not change that fact. And this sort of stuff is bad for business as Elon will find out. After all, advertisers do not want to do business with a platform full of racists.
Then there’s a rather bizarre answer that Elon Musk gave in a Twitter Space chat about why he bought Twitter:
Finally, Elon’s got a big problem with one of his other companies. Neurolink is under investigation:
The investigation into Neuralink Corp – which is developing a brain implant – was opened in the US following complaints from staff, Reuters reports.
Staff have complained that animal testing is being rushed and is causing needless suffering and deaths, according to the news agency.
And:
Reuters, citing sources familiar with the investigation and internal company documents, reports that the company has killed about 1,500 animals since 2018 including pigs, sheep and monkeys.
The number is not necessarily indicative of malpractice or wrongdoing, as medical companies of various kinds routinely use animals in experiments.
But dozens of documents seen by the news agency suggest growing concern within the company about the animal tests. Some failed tests reportedly had to be repeated, increasing the number of animals that died in the process.
Some employees’ reportedly tied the failed tests to pressure from Mr Musk to accelerate research as the company works to develop its brain implant, which it has said could potentially help paralysed people walk again and address other neurological diseases.
Elon is quickly becoming the man of 99 problems. And this one is a big one both from a legal standpoint and from a PR standpoint as I fully expect groups like PETA to start making his life miserable. Which in turn will make him do and say things that will only end badly for him.
I wonder where any or all of this will lead? We’re likely to find out soon enough.