Since buying Twitter for $44 billion (about 298.5 billion yuan) in October last year, Elon Musk, the world's richest man at the time, immediately made drastic savings, from laying off most of his staff to auctioning off second-hand office supplies, and finally turning on rogue mode and not paying rent.
Which owner can tolerate this kind of behavior? So they either take Twitter to court or kick the "tenant" out.
King Charles III of England was one of the "owners" who were angered. Comprehensive British media reported on January 25 local time that because of rent arrears, the British Crown Estate owned by Charles III recently took Twitter to the British court.
Twitter's London headquarters office building belongs to the Royal Property Office. The Royal Property Board is a "commercialisation group" operating Crown Estate. The Crown Property's annual profits are handed over to the British Treasury, which in turn allocates 15%-25% of the profits to the monarch.
Could it be that Twitter's non-payment of rent will have a big impact on the finances of the Royal Property Office? Twitter alone should not be large, and the Royal Property Office can net hundreds of millions of pounds a year just by collecting rent. The total value of the property of the Royal Property Office is 19.2 billion pounds (about 161.4 billion yuan).
British lawyers believe that in the past, British landlords may not mind rent delays too much, especially for large enterprises, they can still tolerate it. However, now that the UK economy has regressed, rent arrears are becoming more and more common, so many landlords no longer tolerate such behavior.
According to reports, although Twitter is still renting the London headquarters building, all Twitter-related logos have been removed.
Is Twitter going to get out of London? Whether it is withdrawn or not, the rent will be paid off.
As the escrow of Charles III, a large British landowner, the Royal Property Office first contacted Twitter and asked them to make up the rent arrears, but to no avail, so they took Twitter to the High Court in London.
Musk can play scoundrels on the British monarch, and no other rent collectors are at the same time. Shortly before being sued by the Royal Property Office, Twitter was also sued in the United States for non-payment of rent.
Twitter's San Francisco headquarters in the United States defaulted on rent for December last year and January this year, totaling 6.8 million US dollars (about 46 million yuan), and nearly 140,000 US dollars (about 950,000 US dollars) in rent for another office in San Francisco was not repaid.
Also in January, Twitter was kicked out of its Singapore office for defaulting on rent. I don't know that Twitter will also face legal action in Singapore in the later stage.
Could Twitter really not be able to pay the rent? Then take a look at Twitter's finances.
Before Musk bought Twitter, Twitter's income was not proportional to debt, and it owed far more than its annual profits. Every year, Twitter has to repay US$1 billion (about 6.8 billion yuan) in debt interest. Yes, the money is only interest, not counting the debt.
After buying Twitter, Musk's disruptive changes to Twitter forced advertisers to divest in Twitter, and 90% of Twitter's revenue comes from advertising. In November and December, Twitter lost 55% and 70% of its advertising revenue, respectively.
The house leak coincided with overnight rain, and the boat was late and hit the headwind.
For Twitter, which is not a one-way disaster, Musk lays offs, auctions, closes a data center, and defaults on rent, saving money, regardless of whether it is legal and reasonable.
It should be mentioned here that the auction of Twitter office supplies sold for a total of 100,000 US dollars (about 680,000 yuan), which is not enough to cover the rent arrears of the San Francisco office space (140,000 US dollars mentioned above).
The US media believes that the current Twitter may go bankrupt, or Musk may sell Twitter.
One columnist wrote: "Twitter's current decline will require a lot of money and a lot of time to reverse... Musk needs billions of dollars to get Twitter back to where it was before the acquisition. ”
So, will Musk pay for it himself and continue to invest money in Twitter to fill the hole?
There is no denying that Musk is extremely rich. Even though his assets shrank by $200 billion in a year, a world record, he is the world's second-richest man, and he still has a net worth of about $150 billion.
Musk's money goes and comes fast. From 2023, Musk's assets have shrunk by $13 billion in more than two days, but in just two days, his assets have increased by $11 billion (about 74.6 billion yuan).
While Musk has money, most of his wealth comes from the valuation of Tesla stock. In order to buy Twitter, Musk sold Tesla shares worth 22.9 billion US dollars (about 155.4 billion yuan), borrowed 13 billion US dollars (about 88.1 billion yuan), and brought in some investors.
Will Musk do this kind of subsidizing improperly operated and hopeless Twitter by selling stocks and paying out of pocket? Which capitalist will do it?
On January 25, local time, Yahoo reported that Musk was considering raising $3 billion (about 20.3 billion yuan) in the form of placing Twitter new shares. The money wasn't used to improve Twitter's operations or make up for rent arrears, but to pay off the highest-interest portion of his $13 billion loan.