Value plummeted by over 10% in November alone
Controversy over CEO’s harsh words towards advertisers
The risk of bankruptcy increases due to the loss of advertisers and failure to generate new revenue
The value of social media X (formerly Twitter) has reportedly plummeted by more than 70% in about a year since being acquired by Elon Musk, CEO of Tesla. Some predict a high risk of bankruptcy for X in the new year due to the loss of advertisers.
On the 31st (local time), Axios reported that the corporate value of X was evaluated at a level 71.5% lower than when it was acquired by Musk, citing an analysis by financial investment firm Fidelity.
Fidelity estimated that the corporate value fell by 10.7% in November alone. Particularly that month, Musk worsened the situation by using offensive language, including profanity that starts with “F,” during a public interview with media about advertisers who left X.
In October 2022, Elon Musk made headlines by acquiring Twitter for a staggering $44 billion, transforming the publicly traded social media giant into a privately held company. As part of this significant move, he also introduced changes to the platform’s iconic blue bird logo and rebranded it with “X.”
According to Axios, Fidelity possesses limited insider information regarding the company’s financial performance of X. They also noted that the valuation of X’s corporate worth could be subject to varying assessments.
Voices predicting the possibility of X’s bankruptcy are also emerging. The UK’s Financial Times (FT) claimed in its prediction of major events in the New Year that X is at high risk of bankruptcy due to a decrease in advertising revenue and a failure to create new revenue sources. The BBC also recently pointed out the global major companies’ X advertising stoppage, “bankruptcy might sound unthinkable. But it is possible.” Musk has mentioned the possibility of bankruptcy, saying, “If the company fails… it will fail because of an advertiser boycott.”
By. Hyo Sun Byeon
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