Elon Musk says X is ‘barely breaking even’

Elon Musk’s acquisition of X has at all times been controversial. Some folks find it irresistible, and others hate it. Since his 2022 takeover, the social media app formerly known as Twitter has dramatically modified by way of content material and moderation, and its monetary outlook is reportedly struggling to enhance.

Based on the Wall Street Journal, Musk stated in a company-wide e-mail that “we’ve witnessed the facility of X in shaping nationwide conversations and outcomes,” but in addition that its “person progress is stagnant, income is unimpressive, and we’re barely breaking even.”

This may increasingly not shock many, on condition that X’s rivals, Bluesky and Threads, have seen rapid growth within the months following the 2024 US election. Final yr, reports indicated that X had misplaced tens of millions of lively customers within the US.

X has confronted monetary hurdles for the reason that begin

The banks that financed Musk’s acquisition are near promoting off the debt they incurred

X’s poor monetary prospects are nothing new. When Musk first acquired the platform in 2022, he admitted throughout a Q&A session with workers that it was in “a really dire scenario from a income standpoint.” The Wall Street Journal additionally studies that the key banks concerned in Musk’s deal to purchase Twitter, akin to Financial institution of America, Barclays, and Morgan Stanley, are near promoting among the debt they incurred from financing it.

One of many causes the banks have held onto this debt for therefore lengthy is to keep away from promoting it at a big loss and never getting a return on their funding. To dump a few of this debt, the banks should persuade any third-party traders that X’s monetary future is viable, which is simpler stated than executed.

X has not too long ago began including new options, akin to its AI model Grok, which you need to use to ask questions or generate photographs. It additionally added new job listings and video tab. In December, X raised the price of its premium subscription service to $22 a month within the US, a considerable 37.5 % enhance. No matter occurs, X nonetheless has an uphill monetary battle to face whereas its rivals proceed to develop.

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