Published Jul 31, 2023 Twitter (now known as “X”), once a social media giant, may have seen its value plummet by over 75% since Elon Musk acquired the company in October 2022, the latest numbers suggest. As one of the few external investors remaining, Fidelity disclosed that its stake in Twitter had drastically dropped from $20 million to just under $6.6 million back in May 2023. Now the company’s recent rebranding to “X” has led to another significant loss in value, with experts estimating the move to wipe out at least another 4 billion in brand value. This would put the total valuation of the social media company close to just $10 billion, only a few months after Musk acquired it for $44 billion. The decline in Twitter’s value is a matter of concern for its employees, many of whom received stock options as part of their compensation when the company was publicly traded. In March, Musk offered to value these options at around $20 billion, implying that the company’s value had fallen by at least half since he assumed control. Musk’s leadership at Twitter has led to significant changes within the company, with numerous cost-cutting measures, including over ten waves of layoffs resulting in a headcount reduction of more than 80%. In addition to that, the platform has faced multiple controversies recently over defaulting on rent payments and implementing a new practice of allowing users to pay for verification badges. Now, in his latest move, Musk has decided to rebrand the company as “X”. However, analysts and brand agencies view the renaming as a mistake, considering Twitter’s status as one of the most recognizable social media brands. After all, bird decals symbolizing Twitter can be seen on small businesses and websites worldwide, akin to Instagram and Facebook logos. Meanwhile, some experts also point out that Elon Musk’s own brand might be more valuable than the Twitter brand in the long run. However, the significant decline in value raises questions about the company’s financial health and its ability to regain its former prominence in the social media landscape with the new branding. Thus, as the situation unfolds, all eyes will once again be on how Musk steers the company and if it can recover from the current challenges. Sources: Time, Bloomberg, the Guardian, and Fortune.
Image by Daniel Oberhaus (2018)
News