Musk’s purchase of Twitter (now X) by the numbers – one year later

Elon Musk’s purchase of Twitter was completed on October 27th, 2022. Since that time, he’s changed a lot about the social media platform, and we don’t just mean rebranding it to X.

As the one-year anniversary of Musk’s takeover arrives, many users and tech journalists have taken time to reflect on its history and investigate how the platform is doing on paper.

Numbers aren’t the only thing that matters when running a business; grit, ambition, dedication, and conviction are all essential components of some of the most successful organizations. However, anyone who’s been 50 cents short on buying their morning coffee knows that numbers can also make or break you.

Ever since Musk’s takeover, advertisers have been leaving or pulling back from the platform. This is due to concerns about the company’s stability and management, user hate speech, and associating with Musk himself. It doesn’t help that in September 2023, X (Twitter) removed the option to report misinformation.

By March 2023, Vox reported that more than half of the platform’s top thousand advertisers stopped putting their ads on Twitter. In July 2023, Musk said that Twitter had lost around half its advertising revenue. This month, Bloomberg reported that X’s top five advertisers were spending 67 percent less on the platform.

However, Musk has also insists X is willing to lose money to protect free speech.

You might expect that Twitter Blue, now called X Premium, would help. It’s a subscription service that gives its users perks on the site, like tw0-hour video uploads, encrypted DMs, and 10,000-character tweets.

However, it won’t make up the lost revenue because less than 1 percent of users are signed up for X Premium, according to Bloomberg. That means X is making less than $120 million USD (around $166 million CAD) per year from X Premium. Before Musk’s takeover, Twitter earned around $4.5 billion USD (roughly $6.2 billion CAD) in ad revenue annually.

Now, Musk has said that everyone will eventually need to pay to use X. According to Musk, forcing everyone to pay is a way to eliminate bots from the platform completely.

We’re still negative cash flow, due to ~50% drop in advertising revenue plus heavy debt load. Need to reach positive cash flow before we have the luxury of anything else.

— Elon Musk (@elonmusk) July 15, 2023

Things don’t look positive internally, either. Over the last year, Musk has laid off 6,000 people, around 80 percent of the 7,500 staff Twitter had before his purchase. Many of them were employees who moderated misinformation on the platform. Musk was also criticized heavily in March for publicly mocking a Twitter employee with a disability. He apologized following the backlash.

One year after Musk’s purchase, X’s future is uncertain at best. Banks that underwrote Musk’s debt are preparing to unload it at a discount, according to The Wall Street Journal. 13 percent fewer users are signing in this year compared to this time last year, according to mobile intelligence data provider Apptopia.

And there’s still a whole lot of debt to repay.

Sources: Vox, The Register, Bloomberg, BBC, tech.co, The Wall Street Journal