this post was submitted on 24 Jan 2025
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Technology
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Holy shit, this is going to be hilarious. Imagine the fuckbrains who’d buy this shit.
They're talking getting 5 or 10 cents for every dollar of debt. Which roughly means the buyers need a 5 to 10 percent chance of getting their money back for the deal to make sense (interest rates complicate the EV calculation, and it's not clear what those are).
This is the banks writing it all off and getting whatever they can out of a bad deal. The buyers will probably make money on the deal, even if Xhitter goes into liquidation.
But what could there be to liquidate? Server racks? They don't even own the offices, it's all rented.
Right. There aren't assets there to take and sell. Offices are rented. Equipment depreciates really fast as technology moves on. IP rights are not worth that much since there are many alternatives and some technologies they developed are unique to their own tech stack, and the trademarks are radioactive garbage.
Liquidators go through everything. Five toilet rolls in what was an 8-pack? Liquidate it.
IIRC, bankruptcy puts creditors in order, with employees getting whatever pay they're owed first in line, then debtors, and whatever might be left goes to investors. When you paid 5 or 10 cents on the dollar, you don't have to get much back for the deal to be profitable.
I think you’re missing the point. There are no physical assets. There is users and engagement. That can be used to push a narrative or to sell advertising. As users leave, neither works and there is nothing to sell.
There are physical assets, though. Hopefully enough to pay employees, and possibly enough for this deal to be profitable. It's a risk, but not a crazy one.
Yes, there are, but minimal physical assets. That's the point. They likely aren't even enough to pay employees.