Social Media Giant X Valued at Less Than Half of Elon Musk’s Purchase Price
According to internal documents quoted by the press, social media company X, formerly known as Twitter, is now worth less than half of what Elon Musk paid for it. Last October, the billionaire investor acquired Twitter for $44 billion, a price he later admitted was an overpayment.
X Valued at $19 Billion
Media outlets have reported that X has valued itself at $19 billion. This valuation is based on the equity in the company offered to employees through restricted stock units, priced at $45 per share.
Musk’s Acquisition and Debt
Musk purchased Twitter for $54.20 per share, resulting in a total valuation of $44 billion. The acquisition involved a combination of equity and debt, which left the company with $13 billion in debt.
Musk’s Admission and Long-Term Potential
Musk initially tried to back out of the Twitter acquisition but proceeded with the deal after being sued by Twitter. He has since acknowledged that he overpaid for the company and suggested its value is less than $20 billion. However, Musk still sees long-term potential in X and aims to transform it into a “super app” offering various services.
Controversial Changes and Declining Revenue
Since acquiring Twitter, Musk has made several changes, including renaming it to X and implementing looser content moderation rules. He has also pursued paid subscriptions and downsized the staff. These decisions have generated controversy and are believed to have driven away advertisers. In September, Musk revealed a 60% decline in X’s ad revenue.
Hot Take: Challenges Ahead for X
Despite Elon Musk’s vision for X’s future, the social media platform faces significant challenges. Its declining value compared to the purchase price raises concerns about its long-term sustainability. Additionally, controversies surrounding changes in content moderation and revenue decline from ads suggest that X may struggle to regain advertiser trust and attract new users. As Musk continues to reshape the platform, it remains to be seen whether his ambitious plans can turn X into a successful “super app” and revive its fortunes.
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