Social network X, formerly known as Twitter, has seen its value drop significantly over the past year. According to several media outlets, this loss in value is largely due to the acquisition of the network by billionaire Elon Musk.
As part of an employee stock grant program, X’s valuation was estimated at $19 billion, Fortune magazine and financial news agency Bloomberg reported. To acquire Twitter in October 2022, Elon Musk paid about 44 billion dollars, a considerable sum.
Since the acquisition, Elon Musk has pledged to reposition the social network by renaming it “X” and expressing his intention to transform the platform into a more versatile application, offering primarily financial services. However, the social network is experiencing difficulties, mainly due to a significant drop in its advertising revenue. This decline is partly explained by the fact that many companies hesitate to use X as an advertising platform, for fear of negative consequences for their reputation.
Faced with this financial decline, Elon Musk tried to compensate for the loss of income by offering paid subscriptions. To finance the Twitter acquisition, the billionaire also took out loans worth approximately $13 billion, which currently translate into an estimated $1.2 billion in annual interest, affecting X’s financial health.