The popular social media app X, formerly Twitter, is worth less than half what Elon Musk paid for it over a year ago.
The 52-year-old SpaceX and Tesla entrepreneur bought the app last October. However, recent evaluations suggest he’s lost billions in the venture.
Market Crash For Musk
Elon Musk shocked the world last October when he revealed he had agreed to buy the social media app Twitter.
Now known as X, the social media platform has heavily crashed in its valuation following its year under Musk.
Half The Price
According to the company’s equity compensation plan for its employees, X is now valued at approximately $19 Billion.
Considering Musk bought Twitter for $44 billion, that means the social media platform’s value has decreased by over half in less than a year.
Share Price
The privately held company is reportedly offering its employees RSUs at around $45, according to sources.
X offered its employees stock in March at a $20 billion valuation.
The Company Faced Many Hurdles
Since Musk took over the reins last October, the company has faced many hurdles.
Internal documents have revealed that Twitter suffered challenges, including an 80% employee turnover rate and billions in debt accumulated from the acquisition.
More Problems
In addition to the debt and employee turnover rate, X, formerly Twitter, have lost almost 60% of their US advertising revenue.
This comes as a result of changes in verification and content moderation rules.
Compensation for X Employees
In response to the company’s falling stock price, X has attempted to compensate its employees.
This includes distributing new stock grants as restricted stock at $45 per share and cash payments of $54.20 for outstanding shares from the previous management.
Musk Hopeful for the Future
Despite all of the negative attention surrounding Musk’s acquisition of Twitter, now X, he remains hopeful for the future.
On the anniversary of his buyout, Musk outlined his future vision for X as an all-purpose app that will offer multifaceted services. He has even been backed by X’s new CEO, Linda Yaccarino, who has recently encouraged employees to ignore the critics.
Not all Musk’s Fault
Musk had initially agreed to buy Twitter for $44 billion last April.
The buyout initially hit a wall following a stock crash that hit tech companies hard. By July 2022, Twitter’s stock had dropped from the $54.20 a share that Musk had agreed to pay to around $34 a share.
X Pulled from Europe?
Last month, it was reported that Musk was considering pulling the app from the European market following new EU regulations.
According to reports, it was suggested the Tesla and SpaceX boss would block access in the EU region over disinformation compliance issues with the International Digital Services Act.
Not Going to Happen
However, Musk has since denounced this claim in a tweet by writing he has no intention of pulling out of the EU.
He said the report is “utterly false” and labeled the site that produced the article as “not a real publication.”
The Show Goes On
So, as it stands, even with the plummet in stock prices, Musk is still confident he can turn X into both a successful app and a profitable business.
Over the next year, we may see Musk implement further features to slowly morph the app into what he had planned when he decided to buy Twitter.
