After Elon Musk’s 2022 acquisition of Twitter (now X), the platform saw a mass exodus of advertisers. However, the recent U.S. election results may signal a turnaround. According to Ars Technica, former advertisers are planning a return to X, motivated by Musk’s close alignment with President-elect Donald Trump, who has won a second term.
Executives told the Financial Times that several brands now see Musk’s anticipated influence in Trump’s administration as a reason to re-establish a presence on X. The platform, which saw its valuation plunge below $10 billion after Musk’s acquisition, could potentially rebound as Musk’s support for Trump—backed by over $100 million in political contributions—reshapes the business landscape.
Following the election, X reported a record high in U.S. web traffic for the year and an uptick in daily active users. Notably, while many returned, over 115,000 U.S. users deactivated their accounts on November 6, choosing alternatives like Bluesky and Threads. Additionally, rumors hint at a potential merger between X and Trump’s platform, Truth Social, underscoring Musk and Trump’s long-standing rapport.
The election may also affect the debt held by the seven U.S. banks backing Musk’s acquisition, estimated at $13 billion. Insiders suggest that Morgan Stanley and its consortium will likely hold onto the debt until X stabilizes, avoiding significant losses from a discounted sale.
X faces ongoing challenges in reviving its ad revenue. Sensor Tower data indicates that ad spending by X’s top 100 U.S. advertisers in the first half of 2023 dropped 68% from pre-acquisition levels. Of the 200 advertisers who left in late 2022, only seven have since returned, and new advertisers bring much smaller budgets. According to eMarketer, X’s ad revenue is projected to decline from $2 billion last year to $1.9 billion in 2023, well below the $4.5 billion peak in 2021.
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