Ever since Elon Musk acquired Twitter for $44 billion final yr, it has been a extensively agreed upon stance that he tremendously overpaid for the social media platform.
Nonetheless, the quantity wherein he overpaid appears to be widening post-acquisition.
Based on Constancy(opens in a brand new tab), Twitter is now price round 33 p.c 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 constantly downgraded its personal holdings within the firm, knocking the worth of its stake by 56 p.c(opens in a brand new tab) only a month after the acquisition closed. By the tip of February, Constancy additional downgraded its stake by greater than 63 p.c(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 significantly 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 major 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 per thirty days subscription service that provides premium options, corresponding to longer tweets and movies in addition to the once-coveted blue checkmark badge, to paying customers. Based mostly on the most recent knowledge(opens in a brand new tab) from researcher Travis Brown, far lower than 1 p.c of Twitter’s complete month-to-month energetic person base has subscribed to Twitter Blue.
Twitter’s different subscription product, often called Subscriptions, permits customers to pay a month-to-month charge on to a selected Twitter person with a purpose 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 p.c of the roughly 136.4 million followers he had on the time.
Musk has since introduced that Linda Yaccarino, a former advert government with NBCUniversal, can be approaching board to interchange Musk as CEO. This transfer was ostensibly made to assist flip the tide relating to Twitter’s points with advertisers. Nonetheless, Musk has made it clear that he’ll keep on board at Twitter regardless. Will probably be attention-grabbing to see what course Twitter’s valuation strikes within the coming months.