Tesla's Elon Musk makes first interest payment on buyout debt as Twitter introduces payments

As Elon Musk seeks new revenue streams to turn around the company, Twitter has begun seeking regulatory licenses across the United States and writing the software required to implement payments on the social media site.

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As reported in the Financial Times, Esther Crawford is heading up the development of the payments function at Twitter, and it appears that Crawford is emerging as one of Musk's most trusted lieutenants as a director of product management.

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As Musk has stated in the past, the acquisition of Twitter will be part of a larger plan that aims to develop "the everything app," a service that will provide social networking, peer-to-peer payments, and e-commerce purchasing capabilities.

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A subsidiary of the company, Twitter Payments LLC, was established in August, just before Musk took over the company. It was just announced that Musk has hired Crawford, Twitter's vice president of product management, as the CEO of Twitter Payments.

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Twitter registered as a payments processor with the US Treasury in November, according to a regulatory filing it made with the government. It is reported that the company has now begun to apply for some of the state licenses it will need in order to launch its service.

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In an interview with the Financial Times, two sources said Musk has stated that he wants the system to be fiat first and foremost, but that it can also be structured in such a way that crypto capabilities may be added later.

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At the time of Musk's takeover, Twitter was considering allowing its users to accept tips, or digital payments, from their followers in early 2021, even before Musk's takeover.

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Clearly, Musk is seeking to expand sources of revenue for Facebook as a result of a cratering in advertising revenue since he took over the company, and this move is an extension of his efforts to increase revenue sources. There has been recent reporting that Siddharth Rao, an engineering manager who oversees the engineers working on Twitter's ad business, has informed colleagues during a staff meeting that over 500 of Twitter's biggest advertisers have suspended spending on Twitter since Musk took over the company in October.

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Musk has reduced Twitter's costs since he acquired control of the company. His company has been laid off half of its employees, he has refused to pay rent on the company's international offices, as well as some outstanding bills, including a jet charter, that have not been paid.

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The social networking company Twitter has reported that it has failed to pay $3.36 million in December rent for its offices at 1355 Market Street in San Francisco, California and $3.42 million in January rent for its offices at 1355 Market Street. Due to this, the owner of the building, Sri Nine Market Square LLC, filed a lawsuit in state court against the company.

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There is a report out on Twitter's payment feature at the same time that the social media firm is making its first interest payment on the $12.5 billion in debt Musk used to take the organization private last year. In order to pay a group of seven banks, led by Morgan Stanley, which had been unable to sell the debt to outside investors, the corporation paid a group of seven banks, led by Morgan Stanley.

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Approximately $300 million was estimated to be spent by Twitter on the first coupon, according to Bloomberg calculations and market parties not involved in the Twitter purchase. It is worth noting that Twitter used to pay less than $100 million in yearly interest expenses before Musk bought the firm with debt.

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The debt load of Twitter remains significant despite Twitter's first interest payment. It is expected that annual interest will exceed $1.2 billion, with some of it coming with variable interest rates, which may increase even more as the Federal Reserve raises interest rates further in the future.

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Among the pile of trash bonds are a $6.5 billion loan, which banks had planned to sell to institutional investors, as well as a $6 billion bridge loan which banks had planned to sell as trash bonds, split evenly between a secured and an unsecured tranche.

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Throughout the loan's term, Twitter is also allowed to borrow, repay, and borrow again with a $500 million revolving credit facility. There is a risk that Twitter's interest expense will rise if it borrows money from it.

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