X says it's only worth $19B after year of Muskmanagement
- Reference: 1698776170
- News link: https://www.theregister.co.uk/2023/10/31/x_worth_19b/
- Source link:
It's a far cry from the $44 billion Musk paid for Twitter, now valued at just $19 billion.
While no longer a public company, X employees are eligible for equity compensation in the form of restricted stock units (RSUs) that only have value after a certain vesting period. According to an email [1]reportedly sent to X employees yesterday, X is offering RSUs at $45 a share, putting the company's value at less than half of what Musk paid for it.
[2]
The Register was unable to obtain a copy of the email, and asking X for confirmation was met with an automated response and no further reply. Nonetheless, it's not like we didn't know $44 billion was an inflated number – Musk [3]admitted as much before the deal even closed.
[4]
[5]
"Although, obviously, myself [sic] and the other investors are obviously overpaying for Twitter right now, the long-term potential for Twitter, in my view, is an order of magnitude greater than its current value," Musk said when speaking to Tesla investors during the company's Q3 2022 earnings call last year.
$19 billion, we note, is another drop from the company's reported [6]$20 billion internal valuation in March.
[7]
The Twitter of old relied almost entirely on advertiser spending to keep the bills paid, but since Musk's takeover advertisers have fled in droves. In July, Musk said that X's advertising revenue was [8]down by half . Subscriptions, which Musk and [9]other social media companies are turning to as a new revenue stream, have been a [10]limited success for X, with [11]less than a million users estimated to have bought in to X Premium and Musk [12]claiming the platform reached 541 million active users over the summer.
X recently rolled out [13]two new subscription tiers , one at just $3/month and the other costing more than a month of [14]ad-free Netflix , but with subscriber numbers already such a small share, it's unclear whether new offerings would make much of a dent in X's debt.
[15]Musk, Yaccarino contradict each other on status of X's election integrity team
[16]Twitter's giant throbbing X erected 'without a permit'
[17]X marks the bot: Musk thinks spammers won't pay $1 a year
[18]From cage fight to page fight: Twitter threatens to sue Meta after Threads app launch
Meanwhile, the banks left holding [19]$13 billion of bonds to help finance Musk's impulse buy [20]can't unload the debt and are [21]getting tetchy .
X CEO Linda Yaccarino met with several international financial institutions holding X debt this month, [22]reportedly telling them X would finally be turning a profit sometime in 2024. Musk first claimed X was close to breaking even [23]in April , a figure Yaccarino [24]revised in August as still "near," but not there after four months of Musky maneuvering.
It's also worth noting that X's claims of new engagement highs don't hold up to third-party scrutiny, with web analytics firm Similarweb [25]reporting earlier this month that, one year into Musk's tenure X engagement was "down by every measure."
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Global web traffic to twitter.com (which still works alongside x.com) was down 14 percent compared to a year prior, and in the US - X's largest base of users - it was down by 19 percent. Mobile app engagement was also down by 17.8 percent.
The social media sphere in general has experienced a drop in users, Similarweb noted, but only by 3.7 percent – in stark contrast with the drop in X engagement in the same period.
"If Elon Musk wanted to build traffic to his social media profile, surely there must have been a cheaper and easier way," Similarweb noted. "Coming up on a year after his $44 billion purchase of Twitter … traffic to twitter.com/elonmusk/ is just about the only positive metric of success we can find." ®
Get our [27]Tech Resources
[1] https://fortune.com/2023/10/30/x-formerly-twitter-valued-19-billion-employee-stock-plan/
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ZUGHE@jkqqBCo6XHvICEegAAANg&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://www.theregister.com/2022/10/20/musk_overpaying_twitter/
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZUGHE@jkqqBCo6XHvICEegAAANg&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZUGHE@jkqqBCo6XHvICEegAAANg&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[6] https://www.theguardian.com/technology/2023/mar/26/elon-musk-twitter-value-leaked-memo-less-than-half-paid
[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZUGHE@jkqqBCo6XHvICEegAAANg&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[8] https://www.theregister.com/2023/07/17/twitter_ad_revenue_halved/
[9] https://www.theregister.com/2023/10/31/meta_ad_free_europe/
[10] https://www.theregister.com/2023/05/31/twitter_value_decline/
[11] https://mashable.com/article/x-premium-twitter-blue-subscriptions-creator-monetization-program
[12] https://twitter.com/elonmusk/status/1684978651857596429?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1684978651857596429%7Ctwgr%5E0cfeb607574f4a8b7faf2d39b0b62c86309df144%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Fwww.reuters.com%2Fbusiness%2Fmedia-telecom%2Fmusk-says-x-monthly-users-reach-new-high-2023-07-28%2F
[13] https://www.theregister.com/2023/10/30/x_looks_back_at_year/
[14] https://help.netflix.com/en/node/24926
[15] https://www.theregister.com/2023/09/28/x_election_integrity/
[16] https://www.theregister.com/2023/07/31/twitters_giant_glowing_x_was/
[17] https://www.theregister.com/2023/10/18/twitter_not_a_bot_fee/
[18] https://www.theregister.com/2023/07/06/twitter_threatens_to_sue_meta/
[19] https://www.theregister.com/2022/10/26/twitter_losing_valuable_users/
[20] https://www.theregister.com/2023/10/26/x_video_calling_default/
[21] https://www.theregister.com/2023/10/05/x_twitter_links_details/
[22] https://www.ft.com/content/56cc3153-4862-4a3c-bc23-404a0810ab94
[23] https://www.theregister.com/2023/04/19/musk_says_twitter_advertisers_can/
[24] https://www.cnn.com/2023/08/10/tech/x-ceo-linda-yaccarino-threads-meta/index.html
[25] https://www.similarweb.com/blog/insights/social-media-news/x-twitter-musk/
[26] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZUGHE@jkqqBCo6XHvICEegAAANg&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[27] https://whitepapers.theregister.com/
My offer
Fifty cents. Cash.
Then I can shut it down.
$ 19 x 10^9, really?
There is still a lot of creative accounting going on here, presumably to to avoid any allegations of fraud by creditors until the bankrupt plan is ready.
Somewhat surprised by the traffic numbers to be honest but would expect the decline to have accelerated over recent months as some noteworthy figures jump ship, either because they're annoyed by all the crap, or because they notice subscribers moving elsewhere.
Re: $ 19 x 10^9, really?
That's a valuation based on stock he's letting employees buy. No doubt they are significantly overvaluing it, so that any suckers employees who buy it are merely giving it some more cash to hang on a little longer before Musk drives it fully into the ground.
If Musk wanted to build traffic to his social media, there must have been a cheaper and easier way
He could have set up an Elon Musk Fan Club online, given away a free Tesla Model 3 to the first half a million people to sign up and still lost less than $25 billion.
Doing better than expected?
I am actually surprised the user bleed has been so small. I left twitter on Musk-Day and while twitter was always a hellsite, it sounds way worse now. Even being marginally more toxic or less user friendly should have been enough to kill it.
I guess twitter has always been a smaller, niche site, more important for its use by politicos and media types than for the actual user reach. As long as it has that still, it will shamble along?
Worth
That's like quintillion Roubles now?
Musk will be able to buy himself a nice dacha for all terrorist Russian propaganda he is allowing on the platform.
Investors
I'm sure plenty of authoritarian governments would love a stake in return for certain concessions. Monitoring of citizens, suppression of undesirable facts, elevation of alternative facts.
Still the World's richest
He's supposed to care?
Re: Still the World's richest
Yes. His entire image is based on this incorrect notion that he's some kind of master businessman. People tend to forget about his time at PayPal, where they had to kick him to the curb, and focus only on Tesla... which was already a company before he came along. He's cultivated this myth that he founded the company (he didn't) and singlehandedly is responsible for its success (he isn't). Now that people have gotten a good look at his incompetent fumblings at Twitter, where he hasn't managed to do a single thing correctly in the year since he took over, people are going to look at his handling of things at Tesla differently. That matters because he is absolutely leveraged up to his eyeballs. I forget the exact number, but I want to say it's something like 80% of his Tesla shares are already spoken for in one way or another. He even made the stupid and risky move of using some of his Tesla shares as collateral on stock option purchases. He's one margin call away from his own personal Black Friday.
And he's been running a pump and dump scam on the Tesla stock basically ever since he took over. He's even flat out admitted to it on Twitter. If the SEC starts poking around, looking at some of his other tweets as potential forms of market manipulation, is entire net worth could go poof pretty much overnight.
I just don't see how Musk ever thinks he can make it worth what he paid for it never mind grow the business to be worth more than $44bn without the advertisers?
As they will never be enough people willing to pay for what Twitter offers to make money from subscriptions. Personally i wouldnt be willing to pay for access to any social media app. But no doubt a lot of people would if they were told they would get locked out of Instagram, Facebook or Tiktok if they didnt sign up for a subscription as they spend hours on these every day. But for access to Twitter, i think most people would just go meh, oh well never mind ill use something else, if they had to pay.
I Still Call Shenanigans
Unless he opens the Twitter books, there is absolutely no way in hell that I will ever believe they are anywhere near break even, let alone profitable. The only way that pencils out with advertisers fleeing in droves is if you basically ignore almost everything in the liabilities column. Like the money owed to landlords, other vendors, former employees, etc. Even if every single person using Twitter signed up for a blue check, it wouldn't be enough revenue, and we all know that's not happening. The world thinks SBF is responsible for the world's biggest financial scam but it'll look downright paltry once the bubble pops on Tesla stock and the SEC finally goes after Twitler for the pump and dump scam he's been running at that company for years now. I can understand the SEC being asleep at the switch during the Trump years, but there's no reason this shit should still be going on.
Also, I'm kind of surprised El Reg didn't report on the fact that Mr. Work-From-The-Office Twitler, and the "CEO" both called in remotely from somewhere else. Everyone else is expected to show up to the disgusting offices that probably will need to be cleaned with a blowtorch once Twitter's evicted, but of course they can call in from wherever they want.
Burn, baby, burn
What is that called again ?
Ah yes, the Bonfire of Vanities.
And with this abject failure, His Muskiness will have learned nothing.
The banks, on the other hand . . .