When Elon Musk bought Twitter in 2022, his many critics gleefully predicted a catastrophe. We were told that everyone would quit the site for its rivals, such as Bluesky and Mastodon. The rebranding to X made Musk the object of ridicule. Musk was warned that he was unlikely to see a return on the $44 billion (£38.1billion) he had splashed out on the site. But hold on: today brings news that Musk is attempting to raise extra cash for his site at the same valuation as what he bought it for. Musk’s critics will no doubt say he is deluded. But his business acumen speaks for itself: this is a man who built a car company from scratch and beat Nasa at its own game. So, yes: X under Musk’s leadership has changed; but the site is thriving. X’s death appears to have been greatly exaggerated.
There is no doubt that Musk’s shake-up at X has been controversial. When he took control, the tech billionaire cleared out almost 80 per cent of the staff and dramatically reworked the site’s business model. The liberal-left, who had dominated the site, reacted in horror. Many have since decamped for alternatives, doing their best to make a scene on the way out. They hoped that their departure would open the floodgates. For a time, that seemed likely. Yet Musk’s confidence that his site is worth what he paid for it three years ago serves as a big rebuke to his critics.
Bloomberg reports that Musk is in talks to raise money at the same $44 billion (£38.1 billion) valuation he paid for the site. Of course, it remains to be seen whether there will be any takers. But if Musk can raise equity at that price, perhaps he won’t have lost any money after all. Indeed, given that X is now operating on a far leaner base, he may even make a profit over the next few years.
It is starting to look as if Musk was right all along. It turns out that X did not need a bulging diversity, equity, and inclusion (DEI) team, or indeed most of its staff; it certainly didn’t need to spend huge sums of money regulating what people post. The disapproval of the great and the good at what has happened to X doesn’t seem to have made any difference. The site has ploughed on, even after losing users such as Jamie Lee Curtis or Barbra Streisand, along, of course, with all the centrist dads who stormed out in a flamboyant huff. Even the boycott by advertisers doesn’t appear to have killed it off. X has been just fine, and appears to have bounced back. Meanwhile Bluesky, its main rival, and the new home of all the Musk haters, is only likely to be valued at $700 million (£560 million) in its latest finding round.
Bluesky’s valuation shows that providing an alternative to X does not appear to be as great a business opportunity as some people thought it would be. At some point, Musk’s critics may have to concede that the entrepreneur has a point, and it is perfectly possible to run a far leaner company. Who knows, perhaps the US government will survive similarly brutal cuts – and, despite all the predictions of collapse, emerge in far better shape as well.
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