Twitter made the first interest payment of $300 million to Morgan Stanley and seven other lending institutions.
By Bhushan Akolkar
Updated
2 mins read
After Elon Musk took over the reins of Twitter last year in October 2022, the social media giant paid the first interest payment on its $12.5 billion worth of debt. Sources familiar with the matter told Bloomberg that the social media giant paid roughly $300 million that was due January 27.
During Elon Musk’s purchase, the social media company took a total of $12.5 billion worth of debt. Over the last year, Elon Musk has sold nearly $40 billion worth of Tesla shares, part of which he has used to fund the Twitter acquisition.
Morgan Stanley is the current banking partner to lend this amount to Twitter. During its current interest payment, Twitter paid the amount to a total of seven banks. Ever since Elon Musk took the charge of Twitter last October 2022, he has been focused on reducing costs.
Soon after the takeover, Musk laid off half the workforce at Twitter while introducing new plans for the Twitter Blue subscription service, which offers the subscribers the most sought-after “verified” badge.
Last month, Elon Musk stated that Twitter “has been in the fast lane to bankruptcy since May”. The billionaire also blamed “activist groups” for pressuring companies to drop advertisements on the platform which has led to a massive hit in Twitter’s revenue.
Two sources familiar with the matter stated that Twitter is taking a step further for making its payment feature a reality. The sources said that Twitter is building a payment system wherein they can add crypto functionality in the future.
Twitter chief Elon Musk has long hinted that the platform would incorporate payments in his vision to making Twitter an “everything app”. Although the payment feature would initially support fiat currencies, it would add digital assets in the future if they see the opportunity.
In December last month, a few leaked images revealed about “Twitter Coins”, a digital asset that could be probably used for tips and payments on the platform. To bring the payments feature to its platform, Twitter has already started applying for state-based regulatory licenses. In November 2022, “Twitter Payments LLC” registered with the US Treasury Department’s Financial Crimes Enforcement Network. The company hopes to secure US licenses for payments within a year.
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Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
