Reuters media columnist Jennifer Saba estimated the company’s valuation at $8 billion this week, based on Musk’s public statements that advertising revenue has fallen by half since he took it private.
That is less than the $13 billion in debt that X owes creditors, and far less than the $44 billion that Mush paid for the company last October.
X does not publish financial data, and Saba’s estimate is based on estimated annual revenue of $2.5 billion – about half what it was before Musk’s takeover – and a 3x enterprise-value-to-sales multiple, the same as competitor Snap.
Separate third-party data provided to Reuters supports Musk’s claims of plunging sales, showing monthly US ad revenue at X has declined at least 55 percent year-over-year each month since his takeover.
X has struggled to retain some advertisers since the takeover, as brands have been wary of rapid changes under Musk’s ownership, including his rebranding of the platform.
Musk’s latest change this week infuriated some users, after he removed the headlines from links to news articles.
Linked articles now appear as an image, and include text in the left-hand corner noting the domain of the link. Users must click on the image if they wish to visit the full article, which could lead to confusion.
The change drew harsh criticism from users who argued that it made it difficult to distinguish between news and other types of information shared on the platform.
Journalist Tom Warren of The Verge criticized the move in a post on X: ‘It’s the latest in a long line of dumb changes on this platform.’
‘I can’t tell between an image and a link to an article anymore. why did this change,’ one user wrote.
Another said that the change ‘really ruins the UX [user experience]’ adding that links now ‘looks like someone just shared an image’.
X’s chief executive, Linda Yaccarino, was expected to meet on Thursday with bank lenders who helped finance Musk’s acquisition to outline the company’s business plans, according to a person familiar with the plans.
The company’s US ad revenue dropped by 78 percent in December 2022 compared with the same month the previous year, the steepest monthly decline since the acquisition, according to ad analytics firm Guideline, which tracks advertising spending data from major ad agencies.
Ad revenue in August, the latest data available from Guideline, declined 60 percent year-over-year. X declined to comment on the data.
Musk has previously acknowledged that the platform has taken a hit on revenue and has blamed activists for pressuring advertisers.
Last month, he accused the Anti-Defamation League of being the primary cause behind a 60 percent decline in US ad revenue, though he did not provide a time frame.
In a statement on Wednesday, the ADL said any allegation that it caused losses to X were false. The organization added it was prepared to begin advertising itself on the platform ‘to bring our important message on fighting hate to X and its users.’
During an interview at Vox Media’s Code conference last week, Yaccarino said 1,500 brands had returned to the platform in the previous 12 weeks, and that 90 percent of the top 100 advertisers were back on X.
She added that X could turn a profit by early next year.
Musk rebranded Twitter as X in July as part of his plan to transform the company into an ‘everything app’ and offer a variety of services in addition to social networking, similar to apps like WeChat in China.
This includes building peer-to-peer payment features and increasing the amount of video content on the platform, Reuters previously reported.