Elon Musk Thinks X Could Become A Trillion Dollar Company—Here Are The Challenges Facing The Platform Since He Took Over
Elon Musk expressed his belief on Wednesday that X, formerly known as Twitter, has the potential to become a trillion-dollar company. This ambitious valuation is rare, considering the challenges and turmoil that have arisen since Musk took over the company last year. After acquiring Twitter, one of Musk’s initial actions was to lay off a significant portion of the workforce, reducing staff numbers from over 7,500 to around 1,300. This move raised concerns about the platform’s ability to maintain itself, moderate content, and comply with regulations. The layoffs were handled in an abrupt manner, leading to multiple lawsuits from former employees, which could cost X hundreds of millions of dollars.
Unpopular policy changes, such as easing content moderation and implementing a paid subscription model, along with overhauling the identity verification system, have caused chaos and spooked users. The new system was abused by impersonators, leading to a decline in advertising revenue as companies pulled their ads. X is also facing numerous legal issues, such as unpaid office bills, a major copyright lawsuit for allowing users to post copyrighted materials, and potential regulatory troubles for failing to curb the spread of illegal content and not compensating news publishers.
Since Musk’s arrival, the platform has also experienced technical problems, including outages, privacy glitches, random logouts, and restrictions on user visibility and post limits. X is now facing competition from rival platforms, including Bluesky, Spill, and Meta’s Threads. While Threads initially saw rapid growth, it has since experienced a decline in users.
Despite these challenges, Musk remains confident in X’s potential. In a recent post, he mentioned that a trillion-dollar market cap for the company is “not out of the question.” This is not the first time Musk has made such bold predictions, as he is known for his sometimes outlandish forecasts. The estimated value of X has already seen a significant increase since Musk bought it for $44 billion in 2022. As part of the company’s transformation, Musk rebranded it to X, changing the iconic bird logo. Experts have raised concerns that this rebranding could potentially erase billions in brand value, but Musk aims to turn X into an “everything app” similar to China’s WeChat, which combines various features like ride-hailing, food delivery, payments, investing, and messaging. This rebranding presents an opportunity for Musk to elevate the platform beyond social media.
With a current estimated net worth of $231.2 billion, Musk tops Forbes’ list of the world’s richest people. His wealth is primarily derived from his stakes in Tesla, SpaceX, Neuralink, and the Boring Company. Tesla became the sixth company in U.S. history to surpass a $1 trillion market capitalization in 2021, while currently valued at over $730 billion.
In conclusion, Elon Musk’s optimism about X’s potential for trillion-dollar success is accompanied by numerous challenges and legal issues. However, Musk’s previous achievements with Tesla demonstrate his track record of building companies with significant market value. Only time will tell if X can reach such heights and become the next trillion-dollar company.
