Plummeted by 220 billion! The world's richest man, stepping on thunder! Valuation slashed by 71%
3100亿收购案，狂跌71%。
The biggest thunder that Musk, the world's richest man, will step on in 2023 is undoubtedly the plummeting valuation of Twitter, which was acquired with a lot of money.
On January 2, local time, the latest data disclosed by Fidelity, a well-known investment management company, showed that the current valuation of social media platform X (formerly Twitter) has shrunk by 71% compared with Musk's acquisition at the end of 2022.
It is reported that Musk's acquisition of the X platform was priced at $44 billion (about 310 billion yuan). Fidelity's latest valuation report means that the current valuation of the X platform has dropped to about 12.5 billion US dollars (about 89 billion yuan), and the valuation has evaporated by more than 220 billion yuan.
In fact, since the first month of Musk's acquisition of X in October 2022, Fidelity has begun to downgrade its valuation of X. This is the second downward revision of the valuation of X since 2023.
In fact, X officials were also forced to admit the fact that the valuation had dropped significantly.
In October 2023, an internal document released by X on a stock grant showed that X was valued at $19 billion at the time, which is about 56% lower than Musk's initial purchase price.
It is worth mentioning that while X's valuation has plummeted, the market value of other social media platforms has continued to soar: for the whole of 2023, Meta's stock price has soared by 194%, and Snap's stock price has soared by 89%.
Why the crash?
Therefore, behind the sharp drop in valuation, X is experiencing a huge crisis in its business.
The first is that Platform X is no longer attractive to new users. According to data released by Sensor Towner, an app store statistics website, the top download instant messaging apps in the App Store and Google Play Store are Whats App, and other high-download software with instant messaging features include TikTok, Instagram, and FaceBook.
Meaning, X has fallen off Google Play's top downloads list and is almost no longer popular with new users.
The second is that the number of advertisers on the X platform is losing a lot. In early November 2023, Musk liked a post involving "anti-Semitic" remarks, and major funders such as Apple, Disney, Comcast, Paramount, Lionsgate, and the European Commission announced that they would stop advertising on X.
Since then, Musk has been expletive in public interviews with major customers who boycott X ads. However, Musk later admitted that the advertisers' boycott could "kill the company."
In September 2023, Musk admitted that X's U.S. advertising revenue had dropped by 60%.
According to foreign media, X's advertising sales revenue will shrink to $2.5 billion in 2023, far lower than the previous level of about $1 billion per quarter.
Fidelity believes that in November 2023, X's valuation has suffered a sharp decline of 10.7%, which may be mainly due to Musk's anti-Semitic public opinion turmoil.
X's biggest risk: Elon Musk
It should be pointed out that the revenue of the X platform mainly comes from advertising sales, subscription services and data licensing transactions, of which advertising revenue accounts for 70% to 75%.
Therefore, the collapse of advertising revenue is directly or will be directly related to the survival of the X platform.
Not long ago, Musk said in an article published by X that the company is in financial trouble due to a sharp decline in the advertising business. The company's cash flow remains negative due to a drop of about 50% in advertising revenue, coupled with a heavy debt burden.
Notably, the Financial Times predicted in a 2024 Global Preview that X is likely to go bankrupt.
The text reads: Musk often motivates himself with bankruptcy warnings, which he did at Tesla and SpaceX, but this time, with X's advertising business struggling and attempts to create new revenue streams failing, this (bankruptcy) is very likely.
In fact, the greater risk of the X platform may be Musk himself.
After Musk bought Twitter, the first thing he did was a big layoff and a big purge.
From customer service to content moderators, to cybersecurity engineers, and even core members of the creative team, everyone is immune. Large-scale layoffs once led to the "paralysis" of the Twitter platform.
At the same time, Musk completely upended the platform's moderation policy and verification system.
The changes have put advertisers off and led to a sharp drop in the platform's ad revenue, which is the company's main source of revenue.
In addition, under Musk's leadership, Twitter Blue membership subscriptions have been adjusted, and for only $8 per month, they can get innocuous "privileges" such as modifying published tweets and retracting comments.
According to people familiar with the matter, Musk has told employees and investors that he wants subscription revenue to account for half of the company's total business, but so far, there are only more than 1 million paid users of the X subscription service, far below Musk's initial expectations.
Crazy Musk
Although the investment in the X platform has suffered a thunderstorm, it does not affect Musk to become the "most profitable person" in the world in 2023.
According to the Forbes rich list, in 2023, Musk's personal wealth added value will reach 108.4 billion US dollars (about 770 billion yuan), leading the global rich list.
This means that in 2023, Musk's average daily wealth will increase by more than 2.1 billion yuan.
Musk's sudden increase in net worth is largely due to the super ability of his electric car company Tesla and space exploration company SpaceX to attract money.
In the past 2023, Tesla's stock price continued to rise, with a cumulative increase of nearly 130% for the whole year, and a cumulative increase in total market value of 398.3 billion US dollars (about 2.8 trillion yuan).
Musk's rocket company, Space X, has successfully carried out more than 90 launches in 2023, and its valuation has soared to $175 billion (about 1.2 trillion yuan). According to people familiar with the matter, SpaceX will sell its internal shares at $97 per share, raising its valuation to nearly $180 billion.
In addition, according to the latest news released by the Bloomberg Billionaires Index, by the end of 2023, Musk will once again become the richest man in the world, with a current net worth of 254.9 billion US dollars (about 1.82 trillion yuan).
Regarding his wealth accumulation, Musk has said that he is constantly collecting wealth resources in order to make human beings become a multi-planetary species and a real space civilization.
According to the Bloomberg Billionaires Index, the total assets of the world's 500 richest entrepreneurs grew by $1.5 trillion in 2023.
Joining Musk in the top three are French tycoon Bernard Arnault, owner of LVMH, and Jeff Bezos, the founder of Amazon. In fourth place is Microsoft founder Bill Gates, and in fifth place is Steve Ballmer, the former CEO of Microsoft Corporation.