Inside Elon Musk’s big plans for Twitter

Elon Musk has never been accused of dreaming little. He has reinvented at least two industries with Tesla, his electronic vehicle company, and SpaceX, the rocket company – and now his ambitions are transferred to his acquisition of Twitter for 44 billion dollars.

Mr. Musk, the world’s richest man, has presented a pitch-deck to investors in recent days outlining his big – some might say incredible – plans for Twitter and its financial goals. The New York Times got the presentation. Here’s a look at what Mr. Musk sees for social media in the years to come.

In his pitch-deck, Mr. Musk claimed that he would increase Twitter’s annual revenue to $ 26.4 billion by 2028, up from $ 5 billion last year.

Under Mr. Musk, advertising would fall to 45 percent of total revenue, down from around 90 percent in 2020. By 2028, advertising would generate $ 12 billion in revenue and subscriptions of nearly $ 10 billion, according to the document. Other income will come from businesses such as data licensing.

Mr. Musk plans to increase Twitter’s user numbers with services like Twitter Blue, which users pay $ 3 a month to customize their in-app experience. According to the pitch, Mr. Musk expects 69 million Twitter Blue users by 2025.

Twitter would bring in $ 15 million from a payment business in 2023, according to the document, which will grow to around $ 1.3 billion by 2028. The company’s payment business today, which includes tips and shopping, is negligible. There has been speculation that Mr. Musk may introduce payment capabilities to Twitter given that he helped popularize PayPal, the digital payment service.

With all these changes, Mr. Musk expects to be able to raise Twitter’s average revenue per user – a key measure for social media companies – to $ 30.22 in 2028 from $ 24.83 last year, according to the document.

By 2025, Mr. Musk expects Twitter to have 11,072 employees, according to the document. It will be up from around 7500 today.

But from time to time, Mr. Musk expects the number to fluctuate, increasing to 9,225 employees in 2022, and then declining to 8,332 in 2023 before increasing again. It is likely that Musk will lose workers as part of the takeover, before he brings in new talent in engineering, said a person with knowledge of the situation. Share-based compensation costs are also expected to rise to just over $ 3 billion by 2028, from $ 914 million in 2022.

Twitter will add about $ 13 billion in debt as part of Mr. Musk’s buyout plan. But he expects to pay that debt down as free cash flow – a measure of how much money a company has to service its debt – is set to grow to $ 3.2 billion in 2025 and $ 9.4 billion in 2028, according to pitch deck. Free cash flow would increase even if operating expenses and costs also increased, according to the document.

Source link

Back to top button