Elon Musk says X is ‘barely breaking even’

Elon Musk’s acquisition of X has always been controversial. Some people love it, and others hate it. Since his 2022 takeover, the social media app formerly known as Twitter has dramatically changed in terms of content and moderation, and its financial outlook is reportedly struggling to improve.

According to the Wall Street Journal, Musk said in a company-wide email that “we’ve witnessed the power of X in shaping national conversations and outcomes,” but also that its “user growth is stagnant, revenue is unimpressive, and we’re barely breaking even.”

This may not surprise many, given that X’s competitors, Bluesky and Threads, have seen rapid growth in the months following the 2024 US election. Last year, reports indicated that X had lost millions of active users in the US.

X has faced financial hurdles since the start

The banks that financed Musk’s acquisition are close to selling off the debt they incurred

X’s poor financial prospects are nothing new. When Musk first acquired the platform in 2022, he admitted during a Q&A session with employees that it was in “a very dire situation from a revenue standpoint.” The Wall Street Journal also reports that the major banks involved in Musk’s deal to buy Twitter, such as Bank of America, Barclays, and Morgan Stanley, are close to selling some of the debt they incurred from financing it.

One of the reasons the banks have held onto this debt for so long is to avoid selling it at a significant loss and not getting a return on their investment. To offload some of this debt, the banks must convince any third-party investors that X’s financial future is viable, which is easier said than done.

X has recently started adding new features, such as its AI model Grok, which you can use to ask questions or generate images. It also added new job listings and video tab. In December, X raised the price of its premium subscription service to $22 a month in the US, a substantial 37.5 percent increase. Whatever happens, X still has an uphill financial battle to face while its competitors continue to grow.

Related

Bluesky just quietly launched its own version of TikTok

TikTok is back online in the US, but plenty of alternatives are still springing up.