Musk's Twitter Acquisition: A Three-Year Review
Elon Musk's $44 billion acquisition of Twitter has been marred by controversy, failed promises, and a significant loss of users. Despite Musk's initial claims that the acquisition was to "try to help humanity," his actions have instead thrust the platform into the center of far-right hate and conspiracy theories. As a result, many of the platform's blue-chip advertisers have fled, and Musk has been accused of stoking violent protests, including rioting in the UK.
Key Takeaways:
- Musk's initial promises to double revenues and triple users within three years have not been met, with X losing about one-fifth of its US users and one-third of its UK users in 2023-24 alone.
- The platform now generates revenue primarily through premium memberships, with top users earning millions per month for their posts.
- Blue-chip advertisers have largely abandoned the platform, citing Musk's decision to reallow far-right influencers and conspiracy theorists.
- Musk's debt burden has been offset by the launch of the AI company xAI, which "bought" X in March at a 25% drop in value, or $33 billion.
- Despite being a huge underperformer, Musk's acquisition of Twitter through xAI has provided him with significant influence and power, particularly in the global far-right agenda.
Statistics:
- X lost about one-fifth of its US users and one-third of its UK users in 2023-24 alone (Similarweb).
- The platform has a new revenue stream from premium memberships, with top users earning millions per month for their posts.
- Musk's acquisition of Twitter through xAI was valued at $33 billion, a 25% drop from the original $44 billion purchase price.
- xAI owns assets with a tangible value, including chips, making AI a safer financial bet than a social network.
- At its peak, Twitter had about 931 million users.
Sources:
- Similarweb, a digital market intelligence company.
- Elon Musk's open letter to Twitter advertisers (Twitter).
- Ross Gerber, investment manager and former Musk cheerleader.