Elon Musk has revealed that his social media platform X is "barely breaking even". This is stated in a letter he sent to employees earlier this month, The Wall Street Journal reports.
“Our user growth is stagnant, revenues remain unconvincing, and we are barely breaking even,” Musk admitted in the letter. Despite these financial difficulties, Musk emphasized the impact of X, arguing that the platform has played a significant role in "shaping national conversations and outcomes" in recent months. He also noted that competing platforms are beginning to adopt X's approach to "free speech and unbiased truth," likely referring to the new community moderation model implemented by Meta.
Musk's words are confirmed by the growing financial pressure on X. Banks including Morgan Stanley, Barclays, and Bank of America are working to sell some of the $13 billion in debt associated with Musk's $44 billion acquisition of the platform in 2022. To attract third-party investors, banks need to convince them of X's long-term profitability, a task that is complicated by the platform's current financial condition.
Some financial experts have called the acquisition of X one of the worst leveraged mergers since the 2008 financial crisis, as lenders have not yet been able to recover their investments.
To counteract the outflow of advertisers, X filed a lawsuit accusing companies such as Unilever and Mars of violating US antitrust laws by stopping advertising on the platform. Although some advertisers have returned, the platform continues to lose users.