X (Twitter), a Field of Ruins: Blame the 'Dogefather' Musk?

A year after purchasing Twitter in October 2022, Elon Musk believed he had saved the social network from bankruptcy. He aimed for astronomical profits by increasing the user base and enhancing the features of Twitter, now known as X. However, the one-year outcome following the acquisition of the California-based company paints a different picture. Details!

A Year Later, X Sees Its Value Halved

Elon Musk, although the wealthiest person on the planet, paid a hefty price for acquiring Twitter in 2022: $44 billion. At the time of the transaction, each share of the blue bird social network was valued at $54.20. To acquire this, the billionaire had to sell around 4 billion shares of Tesla and accept the $500 million proposed by the crypto giant Binance.

X, the platform formerly known as Twitter, is worth less than half of what Elon Musk paid for it a year ago.

Restricted stock units awarded to employees value the company at $19 billion, or $45 a share, according to a person familiar with the matter

— Bloomberg (@business) October 30, 2023

Bloomberg examined the financial state of Twitter Inc., drawing some details from an internal memo of the company, highlighting the financial difficulties during Musk’s tenure. Apart from the $44 billion, acquired through debts and equity, the social network also amassed a $13 billion debt right from the outset under the reign of the Tesla CEO, a company holding several bitcoins.

However, the new head of X has implemented measures that are not attractive (such as making it favorable for payments and boosting paid features), even driving away advertisers. Consequently, the debts are mounting for the platform aspiring to become an ‘everything app.’ It also seeks to claim the title of a global Finance giant. Bloomberg estimates its directors will have to settle up to $1.2 billion in annual interest on its debt.

X, a Future for Cryptocurrencies?

Elon Musk and his team have kept a veil of secrecy over the introduction of cryptocurrencies into the X ecosystem. It has recently been clarified by the CEO that there will never be a native X crypto.

To address this situation, Linda Yaccarino met with bankers to present the financial plan of X. In her proposal, the CEO highlighted the new products and services of X, notably payments that might include cryptocurrencies, as well as advertising tiers.

It’s also worth noting that Musk plans to introduce paid subscriptions for users for certain X features like Twitter Blue. However, only about 1% of users have decided to pay for these.

Regarding the idea of turning X into a super app encompassing financial services, many await Elon Musk’s combination with Dogecoin (DOGE) and other cryptocurrencies.