Elon Musk says X is ‘barely breaking even’

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 when it comes to content material and moderation, and its monetary outlook is reportedly struggling to enhance.

In line with the Wall Street Journal, Musk mentioned in a company-wide e mail that “we’ve witnessed the ability of X in shaping nationwide conversations and outcomes,” but additionally that its “consumer progress is stagnant, income is unimpressive, and we’re barely breaking even.”

This will not shock many, provided that X’s opponents, Bluesky and Threads, have seen rapid growth within the months following the 2024 US election. Final 12 months, 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 staff that it was in “a really dire state of affairs from a income standpoint.” The Wall Street Journal additionally reviews that the most important banks concerned in Musk’s deal to purchase Twitter, corresponding 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 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 mentioned than completed.

X has just lately began including new options, corresponding to its AI model Grok, which you should use to ask questions or generate photos. 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 % improve. No matter occurs, X nonetheless has an uphill monetary battle to face whereas its opponents proceed to develop.

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