Ever since Elon Musk acquired Twitter for $44 billion final yr, it has been a extensively agreed upon stance that he significantly overpaid for the social media platform.
Nonetheless, the quantity during which he overpaid appears to be widening post-acquisition.
In line with Constancy(opens in a brand new tab), Twitter is now price round 33 % what the billionaire initially paid for it. That places Twitter’s worth at roughly $15 billion. The quantity comes from the funding agency’s personal valuation of its personal stake in Musk’s Twitter, which Constancy helped finance.
Twitter’s valuation from Constancy follows a sample since Musk took over in October of final yr. Constancy has persistently downgraded its personal holdings within the firm, knocking the worth of its stake by 56 %(opens in a brand new tab) only a month after the acquisition closed. By the top of February, Constancy additional downgraded its stake by greater than 63 %(opens in a brand new tab) earlier than knocking it down by a full two-thirds this month.
Regardless of Musk’s latest claims about Twitter quickly breaking even(opens in a brand new tab) and even changing into worthwhile, the corporate’s outlook has not been notably good. Twitter misplaced round half of its greatest advertisers when Musk took over. Many nonetheless had not returned by earlier this yr and those that had continued to promote on the platform have been spending a big quantity much less.
Musk turned to subscription-based income fashions like Twitter Blue and Subscriptions to make up for these losses, however even these have confirmed to be unsuccessful.
Twitter Blue is an $8 monthly subscription service that provides premium options, comparable to longer tweets and movies in addition to the once-coveted blue checkmark badge, to paying customers. Primarily based on the newest knowledge(opens in a brand new tab) from researcher Travis Brown, far lower than 1 % of Twitter’s whole month-to-month lively consumer base has subscribed to Twitter Blue.
Twitter’s different subscription product, generally known as Subscriptions, permits customers to pay a month-to-month charge on to a selected Twitter consumer to be able to entry unique paywalled tweets and different content material. Musk himself leaked that he had round 25,000 subscribers final month or solely 0.018 % of the roughly 136.4 million followers he had on the time.
Musk has since introduced that Linda Yaccarino, a former advert govt with NBCUniversal, can be approaching board to interchange Musk as CEO. This transfer was ostensibly made to assist flip the tide concerning Twitter’s points with advertisers. Nonetheless, Musk has made it clear that he’ll keep on board at Twitter regardless. It is going to be fascinating to see what route Twitter’s valuation strikes within the coming months.