Elon Musk says X is 'barely breaking even'

Abstract

Elon Musk reportedly has stated that X is “barely breaking even” in an e mail to X employees.
The information comes as X’s rivals see fast progress, and the banks that financed Musk’s takeover put together to unload debt they’ve incurred from the deal.
X not too long ago elevated the worth of its subscription, whereas including new options like Grok AI, a job listings tab and a video tab.

Elon Musk’s acquisition of X has at all times been controversial. Some individuals like it, 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.

In response to 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 will not shock many, provided that X’s rivals, Bluesky and Threads, have seen rapid growth within the months following the 2024 US election. Final 12 months, reports indicated that X had misplaced thousands and thousands of energetic customers within the US.

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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 state of affairs from a income standpoint.” The Wall Street Journal additionally reviews that the foremost banks concerned in Musk’s deal to purchase Twitter, equivalent to Financial institution of America, Barclays, and Morgan Stanley, are near promoting a number of the debt they incurred from financing it.

One of many causes the banks have held onto this debt for thus 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 buyers that X’s monetary future is viable, which is simpler stated than carried out.

X has not too long ago began including new options, equivalent to its AI model Grok, which you should utilize 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 p.c enhance. No matter occurs, X nonetheless has an uphill monetary battle to face whereas its rivals proceed to develop.