It is nearing three years since Elon Musk first bought Twitter as part of an acquisition deal that he was not able to get out of, and the executive recently admitted to X's staff that the company is "barely breaking even." Here, Musk also admittedthat the company is not in the state to earn revenue from its operations, and this is despite X going to great lengths to improve advertising and its subscription programs.
To complete the Twitter acquisition, Musk had to borrow from banks and other investors to make up the roughly $44 billion price tag of the social media platform, with banks now making their move to sell.
Elon Musk to Staff: X Is Barely Breaking Even In the Market
The Verge shared a report that got ahold of an email by Musk to his X staff, and the billionaire has already leveled with his employees which revealed their current struggles in the market. According to Musk's email, the social media company is "barely breaking even," and their struggles continue as users continue to leave the platform in favor of alternatives.
On the other hand, Musk also shared that its revenue is "unimpressive," and its user growth is stagnant. Additionally, Musk's antisemitism controversy does not help, with the owner recently embroiled in a 'Nazi' controversy.
That being said, Musk has a ray of hope for the entire X company, and he assured his employees that the company would see a positive cash flow in the coming months, but there were no specifics revealed by the executive.
Banks Are Selling Debt That Musk and X Owes Them
On the other hand, the Wall Street Journal shared a report saying that banks that loaned Musk the money to buy Twitter are now preparing to make a 'coordinated move' to sell off the debts. While equity investors have already sold the value of their stakes by around 78 percent, banks like Barclays, Bank of America, and Morgan Stanley initially held off to avoid selling at a loss.
That being said, banks are now looking to sell senior debts at 90 to 95 cents on the dollar and are hoping that Musk's link to Trump would help.
Elon Musk and His Profit Struggles With X
Musk owes a lot of money because of his bold move to acquire X and make it a private company after being the largest shareholder back in 2022, and despite almost three years in the social media business, they are still struggling. However, Musk's problems do not end there as despite now-President Donald J. Trump winning the election, it led to many leaving the platform and opting for rivals because of Musk's massive ties to the leader.
The first order of business by Elon Musk back, when he became Twitter's owner and CEO, was to move the blue check verification program under the existing Twitter Blue subscription as part of earning more revenue. However, it is not paying off for the company, and its rebrand to X did not help as well, with their recent move last December had Premium Plus tier users facing a price hike that is more expensive by $6.
Moreover, X's advertising business also took a hit over the past two years when Musk made antisemitic comments online, greatly angering many users and leading to many advertisers dropping their partnerships. The latest email from Musk to his staff revealed that their struggles are still ongoing and the company is already in a dangerous situation, with banks already moving towards selling debts.
