Twitter as X: The Platform’s Value Has Declined with Elon Musk
Elon Musk has been the owner of Twitter for a year, has renamed the platform now known as X, and in this context, has also laid off many employees. An analysis now says: The market value of Twitter/X has fallen to 19 billion US dollars.
When Elon Musk flirted with buying Twitter in 2022, he offered 44 billion US dollars. The bid stuck and after the completion of the deal, Twitter was subsequently delisted from the US stock exchange. In the meantime, Musk has renamed the platform X and employees are said to have been reduced to about half. However, in terms of market share, it’s close to zero compared to competitors like Instagram or TikTok, which is now leading to a second look at the valuation of X. Scott Galloway of the University of New York has recalculated the market value of X and sees the potential value at 19 billion US dollars. Galloway’s valuation is based on the assumption that ad revenues from X are at about 3 billion US dollars annually and benchmarks from range enrichers like Snap and Pinterest. Just earlier this week, reports surfaced that X’s ad revenue was down about 50 percent compared to the same time last year, primarily due to advertisers dropping out as some see Twitter/X under Musk walking on a right-wing platform. On the other hand, on Monday X surprised with a new feature that will allow keyword searches of short videos, to be launched next month. Some see this as an explicit attack on TikTok.
Conclusion: The Value of X as Speculative as the Platform Itself
Those who give the alleged valuation from New York faith need to consider several assumptions: The ad market, as well as competition among formats, and Musk’s willingness to make additional investments. In any case, what remains is the approximately annual billion-dollar interest burden on Musk’s credit to secure the X purchase. Skeptics also doubt whether Musk will want to or can serve this in the medium term with current or increased revenues.
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