X, formerly known as Twitter, has seen its value decrease significantly since Elon Musk acquired it a year ago. Current restrictions on stock units given to employees estimate the company to be worth $19 billion, or $45 per share, compared to Musk’s purchase price of $44 billion a year ago.
Since the acquisition, a large number of Twitter employees have either been laid off or resigned. Musk rebranded the company as X, implemented changes to its content rules, and experienced a more than 50% decline in advertising revenue.
According to a memo cited by Fortune, the valuation was revealed. There have been financial challenges under Musk’s ownership, including a $13 billion debt burden and a 60% reduction in sales due to his inconsistent decision-making and relaxed content-safety policies, causing advertisers to withdraw. X also has an estimated annual interest payment of $1.2 billion on its debt, according to Bloomberg.
Musk’s plan for X is to shift away from advertising and focus on paid subscriptions. However, as Bloomberg estimates, less than 1% of users are currently subscribing to its monthly premium service, resulting in an annual revenue of less than $120 million.
Musk has voiced his intention to turn X into an “everything app” that can generate revenue through features such as shopping and payments. The company recently introduced audio and video calling, has a beta version of a hiring service, and has announced plans to launch a news wire. Musk informed employees that X aims to compete with YouTube, LinkedIn, and PR Newswire.
During her meeting with bankers this month to discuss the company’s financial plan, CEO Linda Yaccarino presented ideas for X’s new products and services, including the introduction of advertising tiers. While Musk has previously hinted at the possibility of taking X public, the significant decrease in its value may make that challenging. – Bloomberg
