Fortune

Elon Musk

The once towering giant of social media, X, formerly renowned as <a href="https://www.cryptopolitan.com/best-twitter-threads-of-the-day-august-31st/" data-type="post" data-id="360175" rel="noopener noreferrer nofollow">Twitter</a>, has found its equity taking a plunge to a staggering $19 billion.<a href="https://www.ft.com/content/56cc3153-4862-4a3c-bc23-404a0810ab94" rel="noopener noreferrer nofollow" target="_blank"> </a>
The revelation, disseminated to the staff in an internal memo, signifies a colossal devaluation from its $44 billion acquisition by the tech mogul Elon Musk just a year ago.
A Monday internal communication disclosed that the company has decided to bestow equity, precisely in the form of restricted stock units, upon its employees, fixing the rate at $45 per share.
People privy to the matter confirmed this move, resulting in the current $19 billion valuation as per the employee equity scheme documentation.
This drastic shift in valuation initially came to light through a Fortune report, marking a significant moment, given the high-profile acquisition by Musk that took place amidst a volatile period just prior to a tech stock meltdown.
<h3 class="wp-block-heading" id="financial-turmoil-and-dwindling-revenues">Financial Turmoil and Dwindling Revenues</h3>
The acquisition, backed by substantial financial support from prominent banks including Morgan Stanley, Bank of America, Barclays, and several others, left these financial institutions grappling with the debt associated with this deal.
The acquisition’s aftermath is a grim picture, with the company’s worth plummeting, thereby inflicting paper losses upon these banks.
In an attempt to rectify the situation, Musk presented stock awards to Twitter employees based on an approximate $20 billion valuation in late March, as reported by The Information. However, X’s financial woes extend beyond valuation and debts.
The platform observed a significant withdrawal of ad revenues as marketers expressed apprehensions over Musk’s lenient stance on content moderation, aligning with his outspoken advocacy for free speech.
Despite undertaking a radical cost-reduction initiative and slashing the workforce by over 80%, Musk, in a candid admission in July, acknowledged the platform’s negative cash flow situation.
This was attributed to a 50% nosedive in ad revenues coupled with the heavy burden of debts.
<h3 class="wp-block-heading" id="a-shift-in-strategy-and-future-aspirations">A Shift in Strategy and Future Aspirations</h3>
In a bold move to regain its lost sheen and revenue, X is not just attempting to charm back its advertisers but is also broadening its horizons towards subscriptions and other innovative revenue streams.
Last week’s all-hands meeting was particularly telling, with Musk and X’s Chief Executive Linda Yaccarino unveiling ambitious plans.
They spoke of integrating payment facilities and venturing into financial services, throwing down the gauntlet to traditional banking institutions.
Yaccarino’s conversation with bankers in October was indicative of a slight revenue uplift in the third quarter, recording a high-single-digit percentage growth compared to the preceding quarter.
Furthermore, she expressed optimism about X’s profitability, projecting a positive balance sheet as early as the onset of 2024, showcasing a resilient front despite the platform’s tumultuous journey.
With 245 million daily active users still interacting on the platform, Twitter (X) is at a critical juncture. The substantial drop in its valuation within a year post-acquisition paints a vivid picture of the challenges and upheavals the platform has endured.
Musk’s unconventional strategies and the company’s relentless pursuit of financial stability and growth reflect a saga of resilience and ambition.
Whether these bold moves and strategic shifts will truly pave the way for Twitter’s resurgence and return to profitability, only time will tell.
For now, the world watches as this social media behemoth grapples with its present, aiming to reclaim its throne in the digital industry.

Twitter (X) is now worth $19 billion – The details

Table of Contents

Cryptopolitan_News

Other articles published on Oct 31, 2023

Bankrupt FTX moves $156M worth of assets including Ethereum and Solana

Impressive Price Rally Continues for Solana (SOL) as Ethereum Competitor Hits New Highs

Joe Rogan to Release New Podcast With Elon Musk Today

Alphanomics Review: Your Ultimate Guide to Crypto Onchain Analysis Tool

JPEG’d Issues Warning to NFT Enthusiasts As Phishing Attacks Surge on Crypto Platforms & Communities

Crazy Week! Bitcoin ETF BITO traded $1.7B and GBTC, $800M

Join our free newsletter for daily crypto updates!