X, the platform formerly recognised as Twitter, has undergone a dramatic devaluation, standing at less than half the sum Elon Musk disbursed for its acquisition just a year ago.
Current estimations place the company's value at $19 billion, translating to $45 per share, chiefly due to the valuation of restricted stock units issued to employees.
In stark contrast, Elon Musk's procurement of Twitter Inc. in the previous year amounted to a substantial $44 billion.
Following the change in leadership, characterized by Musk's acquisition, Twitter underwent a series of transformative measures.
The majority of its workforce experienced layoffs or voluntary departures, with the platform being rebranded as X.
Furthermore, significant alterations were introduced to its content regulations, leading to a notable decline in advertising revenue, amounting to over 50 per cent.
The financial trajectory of X under Musk's proprietorship has been marked by challenges. At the time of acquisition, Twitter was valued at $44 billion, encompassing a blend of debt and equity.
Elon Musk's acquisition imposed a substantial debt burden of $13 billion upon the company. Over time, Musk's unconventional decision-making and more relaxed content-safety standards have deterred advertisers, resulting in a substantial 60 per cent reduction in sales.
Additionally, X is encumbered with an annual interest payment obligation of roughly $1.2 billion on its outstanding debt, as previously estimated by Bloomberg.
Musk's strategic vision for X entails a shift away from advertising in favor of subscription-based revenue models.
However, the company has struggled to entice more than 1 per cent of its user base to subscribe to its monthly premium services, translating to an estimated annual revenue of less than per cent 120 million, as reported by Bloomberg.
Musk has been notably vocal about transforming X into a comprehensive "everything app" capable of generating income through diverse features such as e-commerce and payment services.
Recent developments include the introduction of audio and video calling, the beta launch of a hiring service, and plans to unveil a news distribution service.
Musk has communicated his ambition for X to compete with industry titans like Google's YouTube, Microsoft Corp.'s LinkedIn, and Cision's PR Newswire.
During a recent meeting with financial institutions, CEO Linda Yaccarino outlined X's financial strategy, sharing insights into the company's new product and service offerings, including the introduction of advertising tiers.
Musk has previously hinted at the prospect of taking X public, but the substantial decline in the company's value could pose formidable challenges to this endeavour.
Bhuvan Krishna is Staff Writer at Swarajya.
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