Elon Musk’s decision to pull Twitter off the stock market allows him to make major changes quickly, but it also takes the company more heavily into debt, a risky choice for a money-losing business. It is a long-established strategy with notable successes and failures, from computer manufacturer Dell (a success) to toy stores Toys “R” Us (a failure).
But Twitter “is very different from a traditional buyout” of a company that delists from the market, said Steven Kaplan of the University of Chicago Booth School of Business. Most such takeovers are of companies with positive cash flows, Kaplan said, but the social network is losing money — having posted losses in the first two quarters of 2022.—APP
