Former bluebird Twitter, or X as it is currently known, continues to go through difficult times financially. CEO Linda Yaccarino, who met this week with seven banks led by Morgan Stanley, which supported Elon Musk’s purchase of the platform for $ 44 billion, presented her future plans to the bankers. However, while the $13 billion debt remaining after the acquisition was the main focus of the negotiations, it was reported that the value of X was significantly less than even this figure.X has become a financial black hole
We know that Twitter/X was not a very profitable platform before Elon Musk bought it. However, one thing is clear: Things did not get better after Musk’s purchase. Following the changes, companies advertising on the platform cut their spending or stopped it completely. In July, Musk announced that cash flow was negative due to a 50 percent decline in advertising sales. The apparent strategic disconnect between the company’s advertising-focused general manager and its subscription-hungry owner doesn’t look good to the outside either.
Putting all this together, not only is X worth less than what Musk paid, it’s probably less than what he owes. If advertising revenues were cut in half, this year’s sales should be just over $2.5 billion. Considering the market and similar platforms, the value of X is approximately $8 billion, according to experts.
On the other hand, the company has so far covered hefty interest payments of $300 million per quarter, and Yaccarino sees profitable days ahead. But between Musk’s impromptu product changes and his need to win back advertisers, his task is challenging. X is something of a financial black hole right now, eating up most of the value it once had.
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