How the Valuation Took a Dive
In less than a year since Elon Musk acquired the platform known as Twitter, its value has plummeted to less than half of its purchase price. Reports from an internal memo reveal that shares are now valuation at about $45, translating the company’s worth to around $19 billion. If that number sounds shocking, it should. Musk dished out a cool $44 billion when he swooped in back in October 2022. Just think of all the Teslas you could have bought with that difference!
The Shake-Up Under Musk
Musk didn’t just change the name from Twitter to X—he effectively flipped the whole company upside down with a series of controversial changes. These included altering content rules, laying off around 80% of the workforce, and his infamous habit of tweeting things that resonate possibly more with his fanbase than with advertisers. The result? A nearly 20% drop in daily active users! It’s almost as if a reality show took over our social media.
Where Did All the Advertisers Go?
Advertisers have been skedaddling away faster than kids on Halloween night when they’re outnumbered by the older kids with the good candy. Musk himself noted that X has lost about half of its advertising revenue—something that’s creating serious headaches, especially with the platform racking up about $1.2 billion in interest payments on its $13 billion debt. It’s not a great time for ‘Ever-So-Financially-Adventurous’ Musk.
Turning to Subscriptions—A Tough Sell
While Musk has expressed a strong desire to lean into user subscriptions for revenue boosts, the numbers tell a different story. As of now, under 1% of users are willing to pay for a premium subscription—not exactly a ringing endorsement for the business model he envisions. That translates to a hefty pile of around $120 million annually, which may not even cover his coffee budget some days.
Positive Spins: The Creator Revenue Share
Amid the chaos, some silver linings have emerged. One notable initiative is the introduction of revenue-sharing for creators based on engagement. Besides, Musk has taken a firm stance on the importance of factual information by declaring that any posts corrected by the Community Notes feature become ineligible for revenue share. So, no clickbait here folks—accuracy over sensationalism!
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