[Elon Musk](https://leofinance.io/@leoglossary/leoglossary-elon-musk) is behaving like an child after spending $44 billion to purchase Twitter.  Or is he?

The masses will not understand this because, well they tend to understand little when it comes to [financial](https://leofinance.io/@leoglossary/leoglossary-finance) matters.

Elon will throw Twitter into bankruptucy.  He is hinting at this big time.  In fact, it is more like screaming.  Notice how he is tweeting stuff like there is no successor who can save Twitter.  To me, that means bankruptcy.

Once that happens, what the masses go hysterical.  They will start calling Elon a failure, stupid, and a host of other things.  Ironic, they did the same thing to Trump over the bankruptcy of some of his companies.

Here is something that needs to be crystal clear:  

**Bankruptcy to the wealthy is a financial tactic.**

They utilize the [bankruptcy](https://leofinance.io/@leoglossary/leoglossary-bankruptcy) laws to their advantage.  The masses, they tend to get eaten up by bankruptcy.

![image.png](https://images.hive.blog/DQmdMP4R9ehbViiSxysEy7Q5FB7dB33tryWWmoDuVHj1aPh/image.png)
<center>[Source](https://cdn.laruta.io/app/uploads/sites/7/2022/02/22171717/Bankruptcy-1.jpeg)</center>

### Twitter Is A Company

This is what most people miss.  

The bankrupting of a company is vastly different than a personal bankruptcy.  It is not uncommon for the wealthy to set up a company with the intention of firing off into the bankruptcy court.

Here is where most people got it wrong about Trump.  He never declared personal bankruptcy.  What he did was put some companies under, most of them by design.

We need to understand that there are two reasons why the wealthy put a company into bankruptcy.

* to get rid of the mess after all the [assets](https://leofinance.io/@leoglossary/leoglossary-asset) were stripped out and there is nothing left
* to get reduce the [debt](https://leofinance.io/@leoglossary/leoglossary-debt) level that is in the company to emerge with a better looking [balance sheet](https://leofinance.io/@leoglossary/leoglossary-balance-sheet)

For Elon, Twitter will be the second one.

Bankruptcy puts a freeze on all creditors.  All contracts are now open to renegotiation.   In this case, all that office space that is now excess since 2/3 the staff was fired, good luck collecting in bankruptcy court.  They will get pennies on the [dollar](https://leofinance.io/@leoglossary/leoglossary-u-s-dollar) if that.

Chapter 11 is reoganization.  That means the court mandates the company and creditors to work for an optimal outcome *for the company*.  The creditors have to line up in hopes of being make partial (rare they are made whole).  Bankruptcy protects the company from the creditors (while making the lawyers rich).

### Twitter's Numbers

Here is Twitter's balance sheet as shown on [Yahoo Finance](https://finance.yahoo.com/quote/TWTR/balance-sheet?p=TWTR).

This is the end of year numbers (2021).

![twitter.png](https://images.hive.blog/DQmaJwTWZKVcxrtaekoQdFMvnfYEN9F8VzWCrKHEMxagt7M/twitter.png)

Now we will show the quarterly, which runs through Q2.

![twitter.png](https://images.hive.blog/DQmTW8HYKCg1rScui55VmHy7FSF8RTZv8Gz68hfXgPAxa5U/twitter.png)

Notice something on the second one?  The liabilities increased $1.2 billion in 6 months.  They went from $5.4B as of 12/31 to $6.6B in June.  That is absurd.  Can you imagine what they look like now even without the purchase?

That is why reports of Musk ordering [payments](https://leofinance.io/@leoglossary/leoglossary-payment) stopped is believable.  It is another tactic employed by the wealthy.  "Screw it, sue me."  How long will it take for companies to collect going that route?

Of course, if Twitter is tossed into bankruptcy, they are creditors like everyone else.

By the way, bet the ranch at the top of the creditor list will be Elon Musk and the other individuals/entities that financed the buyout.  There is no way they entered this without protection.  It is likely most of the [money](https://leofinance.io/@leoglossary/leoglossary-money) put up was structured as [loans](https://leofinance.io/@leoglossary/leoglossary-loans) to the new company that was established.

### Elon Isn't Stupid

You can cast a lot of things at Elon but stupid isn't one of them.  It takes about 3 minutes to pull up Twitter's numbers as a public company to see what was going on.  Elon and his cohorts walked into this with eyes wide open.  The financial damage is no surprise since it was out there for the public to see.

We can also bet there was a plan from the start.  Elon did not fly solo on this one.  A got a lot of money from funds (read [Wall Street](https://leofinance.io/@leoglossary/leoglossary-wall-street)).  They are adept at taking on situations like this.

There were different funds dropping billions into this deal.  Does anyone think it is going under after 60 days?

The simple fact is these people play the game on a different level from the rest of us.  We enter bankruptcy, we are doing all we can to keep a roof over our heads.  For them, it is just another financial maneuver done to set the game in their favor.  Musk and his Wall Street cronies understand this very well.  If they were lacking, we can be sure their high [priced](https://leofinance.io/@leoglossary/leoglossary-price) attorneys were on the ball.

Twitter will end up as a profitable company.  The vision that Musk has in mind will likely come to pass.  Bankruptcy will be used to stifle the creditors and force them to take a haircut.

As for the [revenues](https://leofinance.io/@leoglossary/leoglossary-revenue), there is this point:

It is funny that through all the drama, Musk detractors keep Tweeting how foolish he is (among other things).  It seems people have to keep engaging.  Of course, they do it on his platform.

Marketing 101: keep them talking about you.


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