Elon Musk’s ambitious venture into the world of social media has hit a rough patch, as an internal memo recently exposed that his platform, X (formerly known as Twitter), is now valued at just $19 billion, less than half of the $44 billion Musk paid for it in October of the previous year.
Musk’s tenure as the head of the platform has been marked by controversial decisions, such as the rebranding to X and an overhaul of content rules. These moves, along with a drastic downsizing that saw approximately 80% of the company’s workforce laid off, appear to have affected X’s appeal to advertisers. As a result, Bloomberg estimates that the platform has lost at least half of its advertising revenue.
This significant drop in revenue has also raised concerns about X’s ability to service the considerable debt it has accumulated under Musk’s ownership. As of the most recent figures, X reportedly owes around $1.2 billion in interest payments on its total debt of roughly $13 billion.
Musk has made it clear that he aims to shift towards a model relying more heavily on paid user subscriptions. However, the current adoption of premium subscriptions stands at less than 1% of the platform’s total user base, generating less than $120 million in annual revenue.
Despite the challenges, there have been some positive developments during Musk’s tenure. X has started compensating individual creators through revenue-sharing payments, a move that aligns with Musk’s focus on promoting accurate information over viral but potentially inaccurate content.
Musk’s long-term vision for X involves transforming it into an “everything app,” taking inspiration from popular super apps in Asia like WeChat. This expansion plan includes integrating various financial services, video calls, and other lifestyle use cases into the platform. There is also speculation that cryptocurrency integration may play a role in X’s future.
Elon Musk’s journey into the social media landscape continues to be marked by both promise and challenges, as he navigates the complexities of transforming a platform that has been a cornerstone of modern communication for many into a multifaceted, information-rich ecosystem.
