X really does mark the spot. As if Elon Musk didn’t have enough problems already, X revenue is tanking a bit worse than expected. After a disastrous fall off a cliff last year, X is adding to Musk’s woes with a further hit to revenue this year.
To give some idea of how bad things already were, X made a net profit of $4804 in Australia in 2023. There’s been talk of the local company being wound up.
This will surprise nobody in the market. Fortune Magazine made a truly damning assessment last year, in which the risk of X going bankrupt was a major topic. The other main topic was an injection of cash to save the company by selling Tesla stock.
Ah… maybe not. What’s the point of pouring cash into what is effectively a rotting corpse of a social media platform? The sheer carnage of the internet’s former leader in social media is beyond belief.
There’s also the little issue of the massive damage to credibility of X. All advice was ignored. The nuts were allowed back. The bots are rampant. That’s a lot of depreciation with nothing to show for it.
Unless Musk wants to issue a blank check to pay for the mess for the next few years, X is a major liability. The advertisers’ boycott won’t go away. Nobody can be forced to advertise on X. It’s not likely they will. The advertisers are furious with Musk’s policy decisions.
That leaves Musk with some rather sour options:
Sell X The sale price may not compare well with his purchase price, but it would end the risks, too.
Put X back on the public market again. He’d have to go as CEO, and the many negative policies would have to be turned around. This would raise money, at least, but how much? What assets back X as it now is?
A private equity deal might shore up the finances. The catch is that the problems would have to be solved on the private equity’s terms. That might not appeal to Musk, or to users who aren’t fans of private equity.
Turn local Xs into franchises. Bizarre as this might sound, it would generate cash and the local Xs would have to find their own way and manage their own markets and costs.
Woo back the advertisers. God knows how, but it makes more sense than doing nothing. Policies would still have to be reversed.
All this will need to happen in the face of a deadly-looking lawsuit against Musk and Tesla which is almost beyond comprehension in its possible ramifications. That should be the priority.
The Blue Bird of Meh-ishness may sing again. Let’s hope it’s not so off-key.
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Disclaimer
The opinions expressed in this Op-Ed are those of the author. They do not purport to reflect the opinions or views of the Digital Journal or its members.
