Hey everyone me kevin here: welcome back to uh, well, uh some breaking news from elon musk, the new york times just posted. I know half the people by the way, don't like the year times. Okay, i get it, but the new york times just broke some big inside information about elon musk's, crazy plans for twitter, which includes like this crazy x, subscriber status, that's potentially to launch next year. It's pretty wild.

Let's get into the details together right here. It's behind the new york times payroll we're going to talk about exactly what the heck is going on in here. So there's a lot quick reminder: we got 10 days left before the prices, thanks to all that inflation go way up on the programs on real estate and property management link down below making youtube videos real estate sales stocks. You can bundle them.

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Okay, but let's get into this because this is a big deal right here inside elon musk's big plans for twitter - here's what elon musk is projecting for twitter's finances and his plans over the next years. Okay, so look at this elon musk has never been accused of dreaming small. He has reinvented at least a two industries with tesla, his ev company and spacex. The rocket company now he's taking this over to twitter 44 billion acquisition.

Now something to know is that today, today there was a lawsuit, a class action lawsuit filed by the orlando police officers association to stop the acquisition of elon musk of twitter unless 67 of shareholders that are not owned by elon musk and there's an important thing about The quote owned by elon musk approve of the deal, but here's the thing they're, claiming that people who are working with elon musk are basically colluding with elon musk. Therefore, when morgan stanley owns 9.5 jack, dorsey owns 2.4 percent and elon musk owns 9.2 they're, basically claiming that 20 to potentially 25 of outstanding shares are owned by elon musk, basically, meaning that every single other human being or industry or whatever, that owns twitter institution. That owns twitter would have to vote to confirm the deal which there's no way everyone would vote for it right. So it's a really interesting lawsuit in florida.

It's a clash, class action. I don't think it's actually going to go anywhere, i'm not so worried about the lawsuit and the market clearly isn't either because remember. This twitter's share price is up like 16 to 19 year-to-date, which it's only not like 20 right now, following the nasdaq down. You know 23 at a beta of probably two twitter would probably be down 40 right now, 40 to 46 year-to-date, if it weren't for this elon deal so elon's, actually propping the value of this up and the fact that we're only four dollars and 40 cents away From the deal price at a closing price of 49.80 implies that the market sees probably a 90 chance of success at this deal going through despite that lawsuit in florida.

So i'm not so worried about that. But it's clearly elon musk's vision, that's propping this up and look at this okay, elon musk has presented a pitch deck to investors in recent days, outlying his grand some might say incredible plans for twitter and their financial targets. Here's a peek into what musk sees for the social media service. He wants to quin tuple revenue to 26.4 billion by 2028, which uh quinn couple is 5x.

Okay, like you do quick, google on that, it's 5x! Okay! This is crazy. 5X revenues in uh. You know what is that uh six years so buy this well by 2028, so it's actually five and a half years. It is pitch deck musk claims he would increase the annual revenue to 26.4 billion.

That is up from five bill last year, now keep in mind right now. People are paying 70 well elon musk is paying 70 times earnings for twitter 70 times. Earnings is actually kind of like a handsome premium right now for a company like twitter, like a lot of companies, have seen massive compressed valuation multiples and if twitter was selling for, like you know, closer to 25 times earnings right now, which probably it would, if it Were not for elon musk buying the deal? Well, that would be you know, a compression of about 65 percent of the share price, which would bring it down to well 32 dollars right, and this is kind of what we'll be talking about somewhere between. You know.

In the 20s low 30s, whatever uh, okay, that's pretty incredible, though, because if he can 5x the rev well, then what you're really doing is you're saying you know the the forward p. You know! Well, that's rev, assuming the same similar thing would happen to earnings. He might run it more efficiently, but just doing a quick divide by that'd be like paying a 14 forward pe to 2028 if he also grew revenue or uh net income by that right anyway. This was fascinated me: cut twitter's reliance on advertising to less than 50 of revenue.

Personally, i think that's surprising, because i think there's a there are a lot of things that you can do with revenue, but i don't think he's or with advertising, but i don't think he really is saying we don't want advertisers. I think what he's saying is we want to have so many other services that advertising is just going to be less than 50. For example, you could have a bitcoin service or you know, crypto integrations. Remember twitter's already been talking about integrating nfts as your profile picture.

Uh and legitimizing them linking them with the blockchain they're, already testing this kind of stuff, maybe more crypto integration. You know you right click on somebody's tweet. You want to share stuff with them. Maybe you can send them crypto right through that who knows, and then they take a fee or whatever, like paypal, would right.

Who knows? They also want to potentially charge for verification services or the ad free experience which they already do via twitter, blue, who knows whatever? So kind of interesting musk's advertising would fall to 45 percent of total revenue down from 90 in 2020. in 2028, advertising would generate 12 billion in revenue, and subscriptions would be nearly 10 billion of that which is kind of remarkable, because you know, let's assume, uh, let's. Let's jump over here to the number of users. Look at this he's expecting uh, 931 million users - that's like uh! You know right now.

At the end of last year we had 217 million users, that's almost 5 x, the number of users, so 931 million users. Let's try some quick funny fun math here: okay, if they think they're gon na get 10 billion dollars in subscription revenues, 10 billion dollars try to write that out appropriately there we go uh and then maybe, let's say 10 of their users actually convert to some kind Of paying pro uh product right so times 10, this would be and then you've got about a billion users. So let's divide by that so uh we're gon na say: 10 billion dollars is generated by 90 million people. Let's get a cost per user, so 10 billion dollars divided by 90 million people about 10 percent of users, that'd be about a hundred and eleven dollars per year.

And if you divide that by 12, that's only about nine dollars and 20 cents a month. If 10 of users and their 900 million users, if 10 pay 9 bucks a month like you know, cheaper than netflix kind of thing yeah, you could actually make that happen, advertising generating roughly the same, it's pretty wild. I mean these are some crazy projections right here. Thanks by the way for the 49 ron, all right other revenue would come from businesses such as data licensing.

Oh, oh there it is there. It is! Oh, my gosh. Oh my gosh data licensing, i'm telling you i've been saying this for weeks, man elon musk's, 40. Chess plan right here is to create the verbal algorithm that elon musk needs the verbal and written algo that he needs for the optimus robot and guess what he controls the company that could license the data.

So he could basically guarantee that it could happen, because you know tesla could license the verbal and communications and language algorithm from twitter and then now twitter's revenue goes up and tesla basically gets a really high quality ai designed by elon and the people he hires for His optimus robot and then they don't even have to in-house train that language algorithm at tesla. I mean no guarantees. There could be other forms of data licensing honestly, but i think that's this 40 chess play right here i mean it's: it's obvious, produce 15 mil in rev from a payments, business uh, that's interesting in 2023, according to the document which would grow to about that's 15. Mil from a payments business, this probably has to do with crypto, which would grow to 1.3 bill by 2028..

The company's payments business today, which includes tipping and shopping, is negligible. There has been speculation that musk may introduce payment abilities to twitter uh, given that he helped populize paypal, the digital payment service, i mean imagine if it became like an affirm. You know, buy now pay later. You see this product you buy now paid later for it and you you pay for it with doge or crypto or whatever right totally possible.

So then you've got uh. Let's see here uh. This is more from the opinion section: okay increase average revenue per user to 5.39 interesting, so maybe he's thinking he can because remember we calculated about nine dollars. So this is about half that maybe he's thinking average annual revenue per user uh and maybe a 20 convert rate right.

Fine. That sounds reasonable to me. Uh reached 931 million users by 2020.. I think he's kind of comparing to like facebook's growth.

I think it's possible, especially if he creates a more neutral platform right, one where you know no party, whether they're, like uh, far lefties or far righties, or even people in the middle are fearful of posting opinions for fear of getting shadow banned by some. Like you know cloak and dagger agency - or you know room in the background like making decisions like downvote that downvote that banned them right instead open source algorithm, you could see exactly all the actions the computers take great idea have. This is interesting, have 104 million subscribers for a mysterious x by 2028, included in musk's, total user estimates or what appear to be subscribers to a new product called x, which would have 104 million users in 2028.? Now remember: uh, we don't know what x is, but we do know that elon musk has created an ex holdings company and who knows maybe x, is like you pay one subscription and you get benefits on twitter. You get benefits on spacex starlink.

You know for internet service, you get a full self-driving with your car and it's all just like this uh. You know triple play kind of thing, like the phone companies do entirely possible right. You get your car, you get your internet, you get your! You know your ad free news and and uh communication software, whatever x subscribers product, shows up on the pitch deck in 2023, with nine million users expected its first year. Okay, now this was interesting uh.

It says here hire 3 600 employees after shedding hundreds. I wouldn't be surprised if of the like 7 000 employees. They have right now, 7 500 employees have they have right now, like a quarter of them, maybe even more just leave as soon as elon musk gets in, because people are just being like yeah yeah. You know i don't want to work for elon, you know and some losers leave or whatever uh, okay, interesting so uh, but in between elon musk expects the number to fluctuate.

Uh, seeing some numbers go up, uh in 2022 and then declining by the tune of about 900 in 2023, before increasing again, probably going to fire people or lose people whatever stock based comp is expected to rise. This is no surprise when you're building out a new company you have stock based comp raise free cash flow to 9.4 bill. That's pretty incredible. Twitter will add about 13 billion debt as part of the buyout plan, but he expects to pay that debt down as free cash flow gross through all these new services.

Okay, uh and then apparently an earlier version of the article misstated two parts of elon musk's pitch deck. Mr musk expects twitter blue to have 69 million users, not 69 million in revenue by 2025. It is also not the case that ex-subscribers is expected. Okay, so they corrected some things here, but apparently elon musk expects that twitter blue will have 69 million users.

Oh damn it elon, damn it you could you couldn't even do it, you couldn't even do it without one joke, uh. Absolutely uh. Incredible! Very, very interesting. Now.

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There are a lot of fun things in this uh honestly. It makes me want to be part of the twitter deal, i'm not so worried about the lawsuits. Uh, i you know it's. It seems very, very fun.

I do think that elon musk has the real potential of two or three xing this company and uh. It's it's. It's very exciting he's also buying this company, basically at the bottom of the market. If you think about it, i mean we're, i mean who knows if we're actually at the bottom, but we're at a pretty trashy time in the market, so who knows but anyway, this is fascinating.

Folks, thank you. So much for being here we'll see you next one have a wonderful week.