Thursday, 24 April 2025
26.1 C
Singapore
29 C
Thailand
19 C
Indonesia
28.4 C
Philippines

Elon Musk admits X is barely breaking even in an email to staff

Elon Musk’s email to X staff reveals the company is barely breaking even, with stagnating user growth and unimpressive revenue.

Since Elon Musk completed his acquisition of Twitter, now known as X, he has openly discussed the company’s financial struggles. In recent months, it has become clear that X faces serious challenges in generating sufficient revenue, with Musk admitting that the situation is dire.

X’s financial troubles and plans

Earlier this month, Musk sent an email to X employees, which was reported by the Wall Street Journal. Musk acknowledged X’s influence on shaping national conversations and outcomes in the email. However, he also warned that the company’s user growth is stagnating, revenue remains unimpressive, and the platform is “barely breaking even.”

This email comes amid reports that banks, which lent Musk US$13 billion to finance the deal, are preparing a coordinated move to sell off some of that debt. The main lenders – Bank of America, Barclays, and Morgan Stanley – have been reluctant to sell at a loss, especially given the economic challenges and Musk’s lengthy legal battle to finalise the purchase of Twitter.

The debt situation and banks’ next move

As the Wall Street Journal reports, some investors have significantly reduced the value of their stakes, with some estimates suggesting reductions of up to 78%. Meanwhile, the banks holding much of the debt hope to sell senior debt at a price close to 90-95 cents on the dollar, with a plan to retain the more junior holdings.

Although Musk has often referred to the platform’s potential, he now faces the reality of over US$1 billion in annual interest payments on the loans. This hefty cost, slower-than-expected user growth, and revenue have left X in a precarious financial position.

AI and new features: Musk’s evolving vision for X

Musk’s email mentioned X’s potential to become profitable within months. However, the company has not seen a breakthrough in its financial performance. Over the past year, Musk has worked to shift X’s focus towards artificial intelligence, introducing new features like job listings and a video tab. Despite these additions, Musk’s grand vision of making X central to users’ financial lives by the end of 2024 appears far off.

As X continues to test Musk’s AI ambitions, whether the company can overcome its financial hurdles and fulfil its promises remains to be seen. Musk’s remarks suggest a path forward, but the challenges are substantial, and only time will tell if X can turn things around.

Hot this week

AMD optimizes models for faster generative AI performance with Amuse 3.0

AMD announces optimised models for faster AI performance with Amuse 3.0, featuring enhanced photo filters, video diffusion, and more.

Bethesda releases The Elder Scrolls IV: Oblivion Remastered – and you can play it now

Bethesda released Oblivion Remastered, which features full visual upgrades and quality-of-life improvements and is now available across major platforms.

Tesla profits drop sharply as sales weaken and Musk backlash grows

Tesla’s profits fall 71% as sales dip, political backlash grows, and hopes turn to cheaper EVs and robotaxi plans.

Tenable uncovers critical privilege escalation flaw in Google Cloud Composer

Tenable exposes a GCP vulnerability in Cloud Composer that allows privilege escalation through interdependent cloud services.

Zoho partners with Cradle to boost Malaysia’s startup ecosystem

Zoho and Cradle are partnering to provide RM44 million in software credits to 4,400 startups, supporting Malaysia's tech innovation drive.

POCO launches entry-level C71 smartphone in Singapore with premium features

POCO launches the budget-friendly C71 smartphone in Singapore, offering premium design, enhanced cameras, and smooth performance at S$109.

NVIDIA uses AI to address climate, wildlife and disaster risks

NVIDIA’s AI tools support climate action, wildlife monitoring, and disaster risk mitigation, with uses spanning sea, land, sky and space.

Netflix raises subscription prices in Singapore again

Netflix again raises subscription prices in Singapore, with new rates for all plans and extra member slots.

GameMax unveils Blade Concept ATX case with bold design and powerful features

GameMax launches the Blade Concept ATX case, which features a striking blade design, RGB lighting, and support for high-end liquid-cooled PC builds.

Related Articles

Popular Categories