Summary

Since Elon Musk's acquisition of Twitter, now known as X, the company's value has plummeted by 71%, with a daily value loss of nearly $73 million, attributed to controversial decisions, staff layoffs, and a significant drop in user engagement and advertising revenue.

Abstract

Elon Musk's leadership at Twitter, since its rebranding to X, has been marked by a steep decline in the company's value, falling by 71.5% one year post-acquisition. This translates to an approximate daily loss of $73 million. Musk's attempts to boost his tweet visibility, subsequent controversial comments leading to an advertiser boycott, extensive staff layoffs, and a surge in hate speech on the platform have contributed to the downturn. The rebranding to X.com has been criticized by experts, including NYU's Scott Galloway, who estimate a significant drop in brand value. Twitter's new CEO, Linda Yaccarino, has a vision for X as a multifaceted interactive platform, yet Musk's scattered focus and the platform's uncertain future raise questions about its survival and success.

Opinions

Musk's efforts to increase his tweet visibility and respond to criticism about his tweets' declining views have been ineffective and may have contributed to Twitter's (X's) decline.
The drastic reduction of Twitter's workforce by 80%, along with the dismissal of key engineers, is seen as detrimental to the platform's functionality and user experience.
Musk's leadership style, characterized by a lack of empathy and angry outbursts, is not well-suited to the social demands of running a social media platform.
Renaming Twitter to X.com is widely regarded as a strategic misstep that has further eroded the company's brand value.
The increase in hate speech due to insufficient moderation has led to a decrease in monthly active users and exacerbated the company's financial woes.
Despite Musk's intelligence and contributions to other industries through Tesla and SpaceX, there is skepticism about his ability to turn Twitter/X into a successful "everything app."
The future of Twitter/X under Musk's leadership is uncertain, with calls for him to focus on his other ventures and allow Twitter/X's leadership to manage the company's recovery and transformation.

Twitter (Now X) Value Tumbles Under Musk's Reign

The value of X has fallen 71% since its purchase by Musk.

A wealthy man enters a bar and starts telling jokes, but nobody seems to find them funny.

He feels embarrassed and rejected. To boost his self-esteem, he decides to buy the bar and declares that since he is now the owner, everyone must like him and find his jokes funny.

Why am I sharing this story? What does it have to do with Twitter (Now X)? Let me explain.

Twitter has created a system that enables Musk's tweets to be shown to all users.

Elon Musk was frustrated as his tweets on Twitter were not reaching a wider audience. To solve this issue, he sought help from his top engineers.

Together, they worked on creating a system that could improve the visibility of Musk's tweets to the entire user base, providing him with unprecedented exposure on the platform. However, during the process of enhancing tweet visibility, Elon Musk fired one of the company's two principal engineers.

Elon Musk Lacks empathy.

Musk fired him because the engineer told him that views on his tweets were declining because the interest in him had declined.

That was horrible to say to Elon Musk, especially because Elon's brother, Kimbal Musk, has been telling the entire world that Elon lacks empathy for years. According to Kimbal, "Elon is a business genius, but he doesn't have a talent for understanding people's emotions. Throughout his professional life, Elon has been known for his angry outbursts."

It is well-known that Elon Musk is brilliant but not particularly skilled in social interactions. Therefore, it may not have been the best decision for him to own a social media platform.

According to Fidelity, one year after being purchased for $44 billion, Twitter's value (now X) has declined by 71.5%. If accurate, Twitter has lost almost $73 million in value daily under Musk's leadership. Imagine purchasing a $400,000 house and waking up a year later to find its value decreased to $114,000. That's Elon Musk's reality. He lost $31,460,000 in one year.

As I stated earlier, while Elon Musk has achieved great success in his various design, engineering, and technology businesses, such as eBay, Tesla, and SpaceX, it does not necessarily qualify him to run a social media company. Let me revisit some of the mistakes Musk has made since purchasing Twitter.

Many incidents led to this financial meltdown.

Last month, Elon Musk made a controversial comment on Twitter. Advertisers boycotted the platform after the comment, and despite apologizing, they did not return. This provoked Musk to tell them to "go *** yourself."
Twitter had 7,800 team members when Elon Musk bought it. Musk laid off 80% of the staff, and now only 1,500 employees work for Twitter.
The lack of enough staff and moderation led to a surge in hate speech on the platform, which caused the monthly active users of Twitter/X to decrease by 15% since Musk bought the platform.
Musk changed the name of Twitter to X.com, which many experts believe was a major mistake.

According to Scott Galloway, a marketing professor at New York University Stern School of Business, Elon Musk's decision to rename Twitter has resulted in a significant decline in brand value. Based on his analysis, the estimated loss in brand value ranges from 4 billion to 20 billion dollars. Given Fidelity's new valuation this week, it is difficult to disagree with Galloway's assessment.

It is becoming increasingly evident that since purchasing Twitter, Musk has made several mistakes. This raises the possibility that he may not be able to fulfill his promise to retool the platform into an everything app.

After the rebrand, Twitter CEO Linda Yaccarino tweeted, "X is the future of unlimited interactivity, focusing on audio, video, messaging, and payments/banking. X aims to create a global marketplace that offers everyone ideas, goods, services, and opportunities. Powered by AI, X will connect people in previously unimaginable ways."

Whether this effort will be successful or not is yet to be seen.

Musk is a brilliant man. However, he needs more focus.

It's difficult for me to see a positive outcome of Musk's effort, but for those who follow my writing, it's clear that I believe Elon Musk is one of the most intelligent individuals of our time. I do not doubt that history will recognize him as such. But for now, I want Musk to focus on SpaceX and Tesla. Two companies will change how we work, live, play, and travel.

If Musk wants to make Twitter/X successful, he must invest in people rather than the business. He needs to allow Linda Yaccarino to do her thing and hire more people to help turn the company around.

Do you think Twitter/X will survive another 5 years?

Your thoughts?