Company X’s Value
Plummets by 55% in a Year
Musk’s Management Blamed
Elon Musk, the CEO of Tesla, paid $44 billion to acquire the global social media platform Twitter last October. A year later, the value of the now-rebranded X has dramatically plummeted, causing shockwaves.
According to internal documents of X obtained by The New York Times (NYT) on the 30th (local time), X has set the value of new stocks paid to employees as incentives at $45 per share.
This implies that the current company value of X is $19 billion, which has decreased by about 55% from the $44 billion Musk paid to acquire X a year ago. At the time of the acquisition, Musk paid $54.20 per share.
The industry points to Musk’s management as the cause of the value decline.
After acquiring Twitter, Musk embarked on a comprehensive overhaul, changing the company’s name to X, among other changes. He altered some content rules, and in the past year, over 80% of the existing 7,500 employees have either resigned or been fired.
Such inconsistent decision-making and a sharp decline in content credibility have resulted in X’s primary revenue source, advertising sales, being halved.
According to Bloomberg, Musk burdened X with $13 billion in debt for the acquisition, forcing the company to pay about $1.2 billion in interest annually.
Despite this, Musk remains optimistic about X’s prospects. He plans to transform X into a ‘jack-of-all-trades’ app encompassing dating, hiring, shopping, and payments. X launched voice and video call services this month and even developed a beta version of the job service.
Musk has suggested to employees that “X will compete with Google, YouTube, Microsoft (MS), LinkedIn, PR Newswire, and others.”
By. Joo Seung Hee
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