Elon Musk has often praised the growth of X (formerly Twitter) since his acquisition of the company, but in a recent email to employees, he painted a much bleaker picture. According to The Wall Street Journal, Musk, in an email to his employees, described the situation as “very dire from a revenue standpoint,” noting that user growth is stagnant, revenue is disappointing, and the company is barely breaking even.
Musk bought Twitter in a $44 billion deal in late 2022. Since then, he made several big changes, like removing the free verified program, adding a paid membership, and renaming the company to X. He also supported Donald Trump for the 2024 US presidential election. These changes, along with a shift to the right politically, caused a drop in ad revenue. However, the company’s financial situation has been improving, according to the Wall Street Journal.
Banks plan to sell part of $13 billion debt linked to Musk’s Twitter deal
The Wall Street Journal reports that banks are planning to sell part of the $13 billion in debt they gave Musk to buy Twitter. An email sent to employees this month, which was confirmed by The Verge, shared that Musk said, “we’ve witnessed the power of X in shaping national conversations and outcomes” but also mentioned that their user growth is stagnant and revenue is ‘unimpressive’.
The banks, including Bank of America, Barclays, and Morgan Stanley, have been holding onto the debt to avoid selling it at a loss, especially after the economy changed and Musk had a long court battle over the deal. While some investors have reportedly lost up to 78% of their investment, the banks hope to sell the debt at 90-95% of its value, keeping riskier holdings.
Musk mentioned in the email that the banks might try to sell using his connection with Donald Trump, as some investors believe the company’s financial situation will improve.
However, Musk had previously said that the company would become profitable “within months,” but it still has over $1 billion in annual interest payments. X is increasingly focusing on Musk’s AI goals, and while it has added features like job listings and a video tab, there’s little sign of the service becoming what Musk promised – a platform to handle “someone’s entire financial life” by the end of 2024.