TITLE: One Year After Elon Musk Bought Twitter, X Monthly Users Are Down 15% and Ad Revenue Has Slumped 54%
https://variety.com/2023/digital/news/musk-twitter-x-acquisition-one-year-user-revenue-decline-1235770297/
EXCERPT: So how’s it going at X today? Not great, according to several indicators.
Millions of users, including several celebrities, have quit in the wake of Musk’s takeover and dramatic refashioning of Twitter. In September 2023, monthly active users for X/Twitter had dropped 15% worldwide (and 18% in the U.S.) year-over-year, according to web analytics provider SimilarWeb. Other third-party measures indicate a roughly similar decline; mobile daily active users dropped 16% on an annual basis in September 2023, to 183 million, according to Sensor Tower. Musk last month claimed that X has 550 million monthly active users, who share up to 200 million posts daily, but it’s unclear how that might compare to past measures. (As a public company, Twitter reported a metric it dubbed “monetizable daily active users”; Musk has repeatedly disparaged Twitter’s former methodology for reporting users and estimating spam/bot accounts.)
Advertising has shrunk even further. U.S. ad spending on X/Twitter by major ad agencies from September 2022-August 2023 dropped 54%, according to ad-analytics firm Guideline (via WSJ). Despite Musk’s promise to marketers that he would not turn Twitter into a “free-for-all hellscape,” advertisers have been wary of Musk’s mercurial decisions, including his move to reinstate thousands of formerly banned accounts (including Donald Trump’s), not to mention his own bizarre posts that at times have traded in conspiracy theories.
The decline in ad sales tracks with Musk’s own comments — and he has accused activist groups, including the Anti-Defamation League, of damaging the company’s advertising business by alleging that X has allowed hate speech to flourish. “Our US advertising revenue is still down 60%, primarily due to pressure on advertisers by @ADL (that’s what advertisers tell us), so they almost succeeded in killing X/Twitter!” he posted on Sept. 4. Musk had threatened to sue the ADL for defamation, but the feud appears to have de-escalated: The group released an Oct. 4 statement saying in part, “We appreciate X’s stated intent over the last few weeks to address antisemitism and hate on the platform.” (Meanwhile, this summer X sued an activist research group, the Center for Countering Digital Hate, over its claims about a rise in hate speech, which X has said are false.)
In March, Musk told employees Twitter’s value had dropped by more than half, to $20 billion. In July, he said the company was still cash-flow negative, citing the drop in ad revenue and a “heavy debt load.”
TITLE: Elon Musk’s chaotic first year at Twitter leaves X Corp. with shaky finances
https://arstechnica.com/tech-policy/2023/10/elon-musks-chaotic-first-year-at-twitter-leaves-x-corp-with-shaky-finances/
EXCERPT: X's finances are further complicated by an estimated $1.5 billion in annual interest payments stemming from the $13 billion in debt Musk used to fund the takeover. That debt hasn't worked out for the seven banks that lent Musk $13 billion, which "currently expect to take a hit of at least 15 percent, or roughly $2 billion, when they sell the debt," a Wall Street Journal report said.
"Bankers close to the deal say that Musk's capricious management and a weakening advertising market could point to a junk-bond rating, a designation reserved for companies at higher risk of defaulting," the report said.
Musk has apparently tried to save money by stiffing vendors and landlords, causing dozens of companies to sue X for unpaid bills. Given the costs of litigation and settlements, it's not clear whether this strategy will save Musk money in the long run.
Some large Tesla shareholders regret that Musk bought Twitter and complained that Musk seems too distracted to properly run the electric carmaker—not to mention his other big firm, the private company SpaceX.
Musk himself regretted the Twitter purchase. He made an unsolicited offer to buy the company, struck a deal on April 25, 2022, after exerting public pressure on the Twitter board, and then attempted to terminate the merger deal about 10 weeks later. Twitter sued Musk to force him to honor the contract, and he finally did so after it became clear he was likely to lose in court.
Whether or not he still regrets the purchase, Musk's first year as owner was just as tumultuous as the litigious months before the acquisition. As Carr of Similarweb wrote, "Musk's decision to acquire Twitter, as it was then known, appears to have been one of history's biggest impulse purchases."
TITLE: Twitter/X plans to launch service to control your 'entire financial life' within a year
https://fortune.com/2023/10/27/twitter-x-control-your-entire-financial-life-2024/
EXCERPT: In a call with workers Thursday, which The Verge obtained a recording of, Musk outlined his vision for the site’s financial integration, saying he expected the feature to launch by the end of 2024.
“When I say payments, I actually mean someone’s entire financial life,” Musk reportedly said. “If it involves money. It’ll be on our platform. Money or securities or whatever. So, it’s not just like send $20 to my friend. I’m talking about, like, you won’t need a bank account.”
It’s familiar territory, in a sense, for Musk, who co-founded PayPal and has been disappointed with Ebay’s handling of the company since its sale. He never gave up the dream of building a global payments platform and has been vocal about his aspirations for Twitter/X. Musk’s run-ins with the “PayPal Mafia” were reported by Fortune all the way back in 2007.
“I think there’s potential to create a more efficient financial system,” Musk said in a CNBC interview earlier this year, adding it would be “poetic to fulfill ultimately the vision that I had for X over 23 years ago, and actually see that come to fruition.”
The company has applied for federal and state regulatory licenses and has been granted them from Michigan, Missouri, and New Hampshire.
Those licenses, which allow companies to receive and transfer funds, are an important first step for Twitter/X’s financial ambitions. To operate across the United States, and between states, however, Twitter will need to receive an individual license from each state, although there is a system that allows companies to apply across multiple states at once.
Twitter will reportedly focus on fiat payment tools initially, although crypto could become a later priority. Musk has been a long-time cheerleader of meme coins, including Dogecoin. Some detractors, however, have argued that he has intentionally driven up that coin’s price. And in June 2022, a lawsuit was filed alleging he was engaged in a “crypto pyramid scheme.”
There are plenty of hurdles, though. Chief among those is whether Twitter has sufficient staff to build out the platform, especially in his accelerated timeframe. (It’s hardly the first time Musk has pushed his workers to the breaking point for an arbitrary date.)
Any financial platform from the company would also face competition from PayPal and Venmo, which hold sizable positions in the market. And Musk’s own reputation could drive away some potential customers, much like his decisions at Twitter have reduced its user base.
Former employees have expressed skepticism about Musk’s plans for a financial platform in the past.
“There is a difference between having ambitions and a vision of the future you would like to see and a solid plan for how to achieve those things,” a former Twitter staffer with knowledge of the payments plan told Fortune in July. “My guess is Elon has traditionally relied on others to figure out the plan and execution. That’s not unusual for people who are futurists or visionaries.”