Elon Musk’s social media platform, X (previously known as Twitter), has reportedly decreased in value to less than half of its purchase price in October of the previous year, according to an internal memo.
Bloomberg reported on October 30 that the internal memo and sources with knowledge of the situation disclosed that restricted stock units recently given to company employees were valued at $45 per share. This valuation puts X at around $19 billion, significantly less than the $44 billion Musk paid for it on October 27, 2022.
Since acquiring the platform, Musk has implemented a range of contentious changes, such as rebranding it to X, modifying numerous content policies, and terminating approximately 80% of the workforce. These drastic alterations, coupled with Musk’s prominent presence on the platform, are believed to have made X less attractive to advertisers. Bloomberg estimates that the platform has lost at least half of its total advertising revenue. Furthermore, the notable decline in revenue has raised concerns about the company’s ability to manage Musk’s debt, as it reportedly has $1.2 billion in interest payments due on its approximately $13 billion in total debt.
Musk has expressed his desire to increase reliance on paid user subscriptions. However, as of now, less than 1% of X’s total user base has opted for a premium subscription, generating less than $120 million in annual revenue.
When Cointelegraph reached out to X for a comment, they did not receive an immediate response.
On the flip side, some positive developments have occurred during Musk’s leadership. One notable improvement is the implementation of revenue-sharing payments to individual creators for their engagement. Recently, Musk announced that any posts corrected by the Community Notes feature would be “ineligible for revenue share,” a move aimed at prioritizing accurate information over potentially false viral content.
Musk has also stated multiple times his intention to transform X into an “everything app,” similar to the super apps popular in Asia, like WeChat. This would expand the social media platform to include a range of services such as financial services, video calls, and other lifestyle features. Additionally, there are expectations that X might incorporate cryptocurrency in the future.