Elon Musk-owned social media company X could lose as much as $75 million in advertising revenue by the end of the year as dozens of major brands pause their marketing campaigns, the New York Times reported on Friday.
It wasn’t worth $44 billion when he bought it. That’s why he tried desperately to back out. The reason the company is in such a dire financial situation is specifically because it was bought at that price and now pays debt service far disproportionate to its actual worth.
You’re also confusing company valuation with operating revenue. $44 billion isn’t how much cash they have on hand and $75 million doesn’t get subtracted from that, so expressing that percentage makes no sense. One number isn’t a percent of the other.
Twitter’s ad revenue is already down more than 50% since the takeover and this is $75 million more of lost revenue on top of that. The company was maybe on a path to profitability at full advertising revenue and without the debt service, but now it is burning cash even as revenues tank.
It wasn’t worth $44 billion when he bought it. That’s why he tried desperately to back out. The reason the company is in such a dire financial situation is specifically because it was bought at that price and now pays debt service far disproportionate to its actual worth.
You’re also confusing company valuation with operating revenue. $44 billion isn’t how much cash they have on hand and $75 million doesn’t get subtracted from that, so expressing that percentage makes no sense. One number isn’t a percent of the other.
Twitter’s ad revenue is already down more than 50% since the takeover and this is $75 million more of lost revenue on top of that. The company was maybe on a path to profitability at full advertising revenue and without the debt service, but now it is burning cash even as revenues tank.