Moody’s is considering downgrading Twitter after the social media company agreed on April 25 to buy Tesla CEO Elon Musk.
Investment Services reviews its ranking on Twitter, taking into account the debt the company may receive as part of the acquisition and the strategic changes promised by Musk. The review underscores uncertainty on Wall Street and the general public about the platform’s future under Musk.
Twitter welcomed Elon Musk $44 billion acquisition Deals on Monday, in a deal that is expected to close in 2022. Twitter will go private upon completion of the transaction.
Musk to make an offer Contributed US$46.5 billion The funding, which includes more than $25 billion in debt backed by major banks as well as $21 billion in equity, is likely linked to Musk’s shares in Tesla.
Upon completion of the acquisition, Moody’s notes that there is a “strong possibility” that Musk will need to pay or finance Twitter’s unsecured notes and convertible debt due to provisions that take effect when an investor acquires more than half of Twitter’s shares. Twitter. shares. The transaction should also reduce the amount of money in the company. These factors, as well as any debt incurred in the transaction, will form part of the consideration.
Moody’s is also considering Musk’s proposals to change the platform. So far, this has included focusing on free speech, the details of which are still unclear, reducing the number of bots and spam on the platform, and exploring paid subscriptions.
“Moody’s believes that any success in improving the company’s operations and diversifying the company beyond advertising, from which it generates about 89% of its revenue, will be credit positive,” Moody’s said.
However, analysts warn of a difficult regulatory and political environment for the company, as well as uncertainty over how the platform will function as a private company.
Source: Hollywood Reporter
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