Big Picture

It’s fair to say Elon Musk has lofty goals when it comes to his $44 billion acquisition of Twitter (TWTR). After the New York Times (NYT) published a pitch deck that he’s showing to potential investors, details are coming into focus. In terms of revenue, Musk says he can quintuple Twitter’s annual sales from $5 billion in 2021 to $26.4 billion by 2028.

In order to get there, Musk says he will reduce the social media platform’s reliance on ad revenue, which now accounts for 90% of sales. The plan would be to get closer to 45%, with ad revenue of $12 billion in 2028, and subscription fees generating $10 billion. Data licensing fees would represent another key source of revenue.

PayPal Connection

Given Elon Musk played a role in popularizing digital payment service PayPal (PYPL), it makes sense he reportedly sees upside in growing Twitter’s payment system. Twitter’s payments business is currently negligible, but includes offerings like shopping and tipping. The goal is to turn it into a $15 million business by next year, growing to $1.3 billion by 2028.

Musk’s pitch deck also lays out key benchmarks in terms of things like average revenue per user, which is considered a key metric for social media companies. He plans to boost this value to $30.22 by 2028, up from $24.83 in 2021. Musk says the $13 billion in debt added to Twitter’s balance sheet as part of the buyout plan will be paid off with added cash flow. He anticipates $9.4 billion in free cash flow by 2028.

X Marks the Spot

Part of Musk’s plan relies on growing Twitter’s user base to 931 million by 2028, up from what was 217 million at the close of 2021. The majority of those users will be on Twitter’s ad-supported platform, as well as Twitter Blue, which charges users $3 per month for a customized experience. Musk predicts Twitter Blue’s subscriber count will more than double in the next six years.

One of the most intriguing aspects of Musk’s plans is something called X. While it’s unclear exactly what X is all about, the plan is to reach 104 million users by 2028. Its potential launch is slated for next year. A detailed pitch deck of this nature certainly doesn’t fit within 280 characters, but Musk is undoubtedly hoping it helps craft the perfect tweet.

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