Elon Musk's X Platform Suffers Value Plunge Amid Controversy and Declining User Base
Summary:
Elon Musk's social media platform, X (formerly Twitter), has reportedly declined in value by over 50% since Musk's purchase in October 2022. Controversial decisions, a drop in daily active users, reduced advertiser interest, and heavy debt have affected the platform's worth. Musk envisions a future reliance on paid user subscriptions and transforming X into an all-inclusive application, incorporating several financial and lifestyle services. Some beneficial aspects include incentive programs for individual creators and encouragement for accurate content sharing.
The social media application X, formerly known as Twitter and currently recognized as Elon Musk's enterprise, has reportedly decreased in value by more than 50% since its purchase by the high-profile tech magnate in the latter half of last year. The Bloomberg report from October 30th states that the recent distribution of limited stock units to the company's personnel was set at a $45 per share valuation, computing to an overall company value of approximately $19 billion. This is a massive plunge from the initial $44 billion that Musk invested to take ownership of the platform on October 27, 2022. Controversial procedures executed under Musk's leadership, such as renaming of the platform as X, amendment of content regulations, and the downsizing of nearly four-fifths of the company's staff, have considerably affected the platform. Since Musk assumed control, the number of daily active users on X has dropped by nearly a fifth.
Musk's severe restructuring, coupled with his candid persona on X, seems to have led to a significant decline in the curiosity of advertisers, with Bloomberg's projections saying X has lost at least half its advertising revenue. This severe revenue decline is causing concern within the entrepreneurial world regarding Musk's ability to manage the company's debt obligations. As it stands, X owes approximately $1.2 billion in interest on its near $13 billion debt total. One of Musk's future plans entails a heavy reliance on paid user subscriptions, but currently, less than 1% of the entire user suite has opted to pay for premium subscriptions, supposing an annual revenue of less than $120 million. No immediate response to these matters was available from X upon being contacted by Cointelegraph.
Contrarily, a few positives of Musk's reign at X have been noted. The company has introduced incentive programs for individual content creators to boost user involvement. According to a recent announcement, Musk put forward a new rule that posts edited by the Community Notes feature would become non-qualifying for revenue sharing. This initiative aims to encourage more accuracy and reduce sensationalized, potentially misleading content on the platform.
Furthermore, on various instances, Musk has emphasized his vision of X evolving into an 'all-inclusive app' based on popular Asian super apps like WeChat, implying the growth of the social media platform into an inclusive utility platform providing several lifestyle and financial services, incorporating video calls and others. There are also speculations about potential future integration of cryptocurrencies into X's offerings.
Published At
10/31/2023 1:52:16 AM
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