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In a recent internal email to employees, Elon Musk, CEO of X (formerly Twitter), acknowledged the platform’s ongoing financial challenges, highlighting stagnant user growth and underwhelming revenue performance. He noted that the company is currently “barely breaking even.”
The disclosure arises as Morgan Stanley, Bank of America, and Barclays are getting ready to sell off a portion of the $13 billion in debt that Musk incurred when he bought Twitter, according to a recent Wall Street Journal report.. The banks intend to sell off about $3 billion in debt, which will be sold at a nominal discount while keeping other junior debt holdings.
Following Musk’s acquisition, X faced significant financial setbacks that led to a decline in advertising earnings and the removal of many companies’ brand presence. The platform is still unable to generate positive cash flow as Musk had predicted in the previous month because it must pay more than $1 billion a year in loan interest payments from the acquisition deal. These concerns were fueled by a recently disclosed internal email directed to X employees, verified by The Verge.
The platform’s revived has begun with Musk’s addition of job listings and specific video features. Despite his lofty 2024 aim for X’s transition into a full financial services platform, he has made only modest headway in this strategic direction. The platform’s original social media direction has given way to an experimental area for Musk’s artificial intelligence ambitions.
The platform’s financial woes have prompted big banks to reconsider plans for disposing of debt acquired through Musk’s takeover. Major financial institutions Morgan Stanley, Bank of America, and Barclays are aiming to dump up to $3 billion in debt tied to Musk’s acquisition, though they intend to keep their junior shares for now.
