An analytical breakdown of Elon Musk's $44B acquisition of Twitter, the LBO debt structure, revenue collapse, 80% workforce reduction, and the strategic pivot to X as an everything app.
Educational content only — not personalized financial, legal, or tax advice.
Elon Musk acquired Twitter in October 2022 for $44B — $54.20/share, a 38% premium. The deal was structured as a leveraged buyout with $13B in bank debt (secured and unsecured bridge tranches at SOFR + spread, blended ~11.5% cost), $7B in equity from co-investors (Sequoia, Andreessen Horowitz, Fidelity, Qatar Investment Authority), and ~$24B from Musk personally. Within 90 days of closing, Musk cut 7,500 of 7,500 employees to under 1,500 — an 80% reduction. Ad revenue collapsed from $4.4B annually pre-acquisition to an estimated $2.5B by 2024 as major advertisers fled brand-safety concerns. Fidelity marked down its X equity investment from $19.66M to ~$5M, implying an enterprise value of ~$10-12.5B. Annual debt service: ~$1.5B. The strategic bet: transform X into an 'everything app' for payments, video, jobs, and AI via xAI's Grok integration. Revenue diversification (subscriptions, API, payments) is the survival plan.