Musk Admits X Faces Financial Struggles Amid Revenue Decline
The social media platform X (formerly Twitter) is teetering on the edge of financial instability, with significant challenges in managing its debt obligations, The Verge reports, citing a letter from Elon Musk to employees.
In the letter, Musk described the company’s financial situation as critical, pointing to a steep decline in advertising revenue and sluggish growth in user numbers. He further revealed that major US banks are preparing to sell off $3 bn of X’s $13 bn debt to investors at a discounted rate.
Bank of America, Barclays, and Morgan Stanley reportedly plan to offer the debt at a 5-10% discount from its face value. Analysts suggest the banks aim to capitalise on Donald Trump’s recent election as US President to attract buyers. Musk’s growing influence could also make the company’s obligations more appealing to investors.
However, X’s financial future remains unclear. Since going private, the company has ceased publishing detailed financial reports, and analysts have significantly downgraded its valuation compared to 2022, when Musk acquired the platform.
The company has also faced substantial challenges, including the loss of major advertisers and growing user dissatisfaction. Musk’s plans to transform X into a financial ecosystem remain unfulfilled, adding to the platform’s uncertain prospects.
