Will Elon Lose Control of Twitter?

Elon Musk is the world’s richest man, with a net worth of some $233 billion. Why is he not paying the people he owes money to? Photo: Chesnot/Getty Images
William D. Cohan
June 18, 2023

Oh dear, what is going on these days with Elon Musk at Twitter? Let’s see: Twitter is being kicked out of its office in Boulder because—wait for it—Elon decided to stop paying the rent. He’s stopped paying the bills for Twitter’s use of Google Cloud and, according to my partner Eriq Gardner, for JAMS, the arbitration administrator that is adjudicating many of Musk’s legal disputes with his ex-employees. He’s also facing a lawsuit from the Wall Street P.R. firm, Joele Frank, which claims it’s owed more than $830,000 in fees for advice it provided during Musk’s campaign to buy Twitter last year.

As a former restructuring and bankruptcy advisor at Lazard, I can recognize the signs of a company in distress. After all, it’s a pretty obvious tell that there’s financial trouble brewing when a company stops paying its bills as they become due. That’s a recipe for financial disaster, or bankruptcy, or both. Last time I checked, if a company has more than 12 creditors—as Twitter does—then any three of them can join together to put a company into an involuntary bankruptcy proceeding. And Elon is in danger here. At some point, the creditors he is mindlessly stiffing on a regular basis are going to get sufficiently pissed to throw Twitter into bankruptcy. 

But I don’t get it, dude. Elon is the world’s richest man, with a net worth of some $233 billion, according to Bloomberg, up an astounding $100 billion so far in 2023. Why is he not paying the people he owes money to? Why is he risking an involuntary bankruptcy filing? And then, of course, there is the upcoming interest payment of around $300 million due to the group of seven or so banks that still hold Twitter’s $13 billion of debt used to pay a portion of the $44 billion Twitter purchase price. I know Elon made the interest payments owed in January and in May. But will he make the next one, due in September? I suppose not paying those (metaphorical) nickels and dimes is one thing. But if he doesn’t pay the banks the $300 million he owes them in September, he will be asking for trouble in the form of a financial restructuring, or worse, a bankruptcy filing.