Musk’s alterations to content policies have resulted in a considerable drop in advertising revenue.
Elon Musk‘s social media platform ‘X,’ formerly known as Twitter, has taken a sharp downturn, currently valued at less than half of what he initially invested in purchasing the company a year ago.
According to a Bloomberg report on Tuesday, citing internal memos and a person familiar with the matter, the company’s restricted stock units paid to employees were roughly valued at $45 per share. The price puts the company’s worth at about $19 billion, showing a stark contrast to the $44 billion Musk paid to acquire the platform in October 2022.
Elon Musk Introduces Fresh Outlook to Twitter
Since the ownership transition, the social media platform has undergone a series of changes. Earlier this year, in July, Musk announced that he had rebranded the platform to X in hopes of turning the company into an everything app.
The billionaire entrepreneur has also made additional changes, including the alterations to content policies and the introduction of the $8 subscription model for users to get verified.
Recently, Musk also rolled out two new subscription tiers: the Premium+, which costs $8 per month and $84 a year with the promise of ads removal and other incentives, and the basic package, which starts at $3 per month and $34 per year.
Musk has also implemented daily view limits on the social media platform as part of his efforts to address “extreme levels of data scraping” and “system manipulation.”
Aside from these features, ‘X’ has experienced a notable downsizing of its workforce, with a significant portion of employees either laid off or choosing to leave voluntarily.
X Faces Financial Backlash
Musk’s alterations to content policies have resulted in a considerable drop in advertising revenue, which has plummeted by over 50% since the takeover. The financial strain has amplified the challenges faced by the company, especially in managing its debts. According to reports, ‘X’ currently grapples with a daunting $1.2 billion in interest payments from its overall debt of approximately $13 billion.
Despite attempts to boost revenue through a subscription-based model, the platform has seen limited success, with less than 1% of its user base opting for premium subscriptions, generating less than $120 million in annual revenue. However, before Musk acquired the company, X generated $4.5 billion in its last full year as a public company from ad revenue.
Last month, Bloomberg reported that the company has also lost a significant percentage of its daily users. As per the report, Musk has made the platform smaller since he purchased the company, noting that the platform recorded about 13% fewer users than the previous year.
Additionally, the company headcount has been reduced to 1,500 employees compared to the 7500 staff that worked in the company before its acquisition.
Elon Musk’s X Now Pays Content Creators
Despite the financial strains, Musk’s tenure has also brought some positive changes, such as the introduction of a revenue-sharing program for content creators. The move aims to regain users’ trust and attract them to post on the platform.
Earlier this month, the company said it had paid nearly $20 million to content creators so far since the introduction of the revenue-sharing program.
Last week, Musk announced that any posts corrected by the Community Notes feature would automatically be disqualified for revenue share in a move that sought to increase focus on authentic information circulation. That same week, during an in-house call with X employees, the Tesla and SpaceX CEO said it plans to turn the company into a financial hub next year to revive interest in the firm.
On October 30, Coinspeaker reported that Musk also intends to incorporate dating features into the platform to rival Tinder. However, the billionaire entrepreneur has yet to reveal the process of integrating the features into the platform.
Chimamanda is a crypto enthusiast and experienced writer focusing on the dynamic world of cryptocurrencies. She joined the industry in 2019 and has since developed an interest in the emerging economy. She combines her passion for blockchain technology with her love for travel and food, bringing a fresh and engaging perspective to her work.
