Elon Musk's social media platform, formerly known as Twitter and now called X, has experienced a significant decrease in value since the tech billionaire's acquisition in October 2022, according to an internal memo. The memo, along with sources familiar with the matter, revealed that recent restricted stock units awarded to X employees were valued at $45 per share, resulting in a company valuation of approximately $19 billion. This valuation is less than half of the $44 billion Musk paid to acquire the platform in October 2022.
Musk has introduced a series of controversial changes to the platform since taking over, including a rebranding to X, alterations to content rules, and a substantial reduction in the company's workforce, involving the layoffs of about 80% of its employees. These drastic changes, along with Musk's prominent presence on the platform, appear to have deterred advertisers, with Musk disclosing a substantial loss in ad revenue for X in July.
The decline in revenue has raised concerns about the company's debt repayment, which currently stands at about $13 billion, with approximately $1.2 billion in interest payments. Musk's plan to pivot towards a paid user subscription model has seen limited success, as less than 1% of the platform's user base has opted for premium subscriptions, yielding less than $120,000 in annual income.
Despite the challenges, Musk has introduced initiatives that have resonated with users, such as compensating individual creators through revenue sharing. Most recently, he announced that posts corrected via the Community Notes feature would become ineligible for revenue sharing, signaling a focus on prioritizing accurate information over viral yet potentially inaccurate content.
Musk's vision for X extends beyond being just a social media platform. He aims to transform it into an "everything app," taking inspiration from popular Asian super apps like WeChat. This expansion would include a wide range of services, such as financial services, video calling, and other lifestyle use cases.
