After six months of delays and high drama, Elon Musk’s takeover of Twitter is expected to close no later than Friday, the final deadline that judge Kathaleen McCormick has given him to complete the $44 billion transaction, unless he wants to find himself back in court. Of course, this is just the end of the beginning as it pertains to Elon’s real headache, which will be to wring more cash out of a company for which he obviously overpaid and, presumably, to eventually make himself and his investors whole and then some.
That’s no easy task. Twitter is a 16-year-old company that didn’t turn its first profit until 2018 and is barely generating enough free cash flow to keep its new crop of creditors at bay. If the deal closes, Twitter’s leverage will be a massive 13x EBITDA and, at least for now it seems, the Wall Street banks will hold onto the debt rather than sell it off and perfect their losses.