How to Lose $31.5 billion

According to Fidelity Investments, “X” is worth 71% less since Elon Musk took over and burned its bridges with advertisers.

Pop Quiz: How do you get a company worth $12.5 billion?

Simple – you buy a $44 billion dollar company and then let your ego run roughshod over employees, users and advertisers until you lose 71.5% of the company’s value.

• Elon Musk bought Twitter 15 months ago.
• The billionaire paid $44 billion for the platform in October 2022, which he later renamed X.
• Asset manager Fidelity says the company is worth 71.5% less than when Musk took over.

What are some lessons we might learn from this debacle?

Don’t fire the people who know what they’re doing.

According to CNN Business, in his first year alone, Elon Musk laid off over 6,500 Twitter employees. This represents roughly 80% of the company’s staff, as there were around 8,000 employees at the time of the acquisition.

Don’t expect the remaining staff members to do the jobs of 5 people. When you fire 4 out of 5 workers, that means the remaining staff must each do the work of 5 people. That’s insane. Even if Musk can frighten employees into working 80 hour weeks, it still doesn’t make up for even half the loss of work hours, not to mention employee burnout, low morale and the desire to flee for better jobs with more reasonable bosses.

Don’t Throw Out a Billion Dollar Brand

It took 16 years to build the Twitter brand people knew and loved, and one day for Musk to change it to the symbol that means ‘don’t’ and ‘no’.

Don’t Let Your Ego Ruin Your Business  

in November, companies such as Disney and IBM pulled their ads from X because Musk appeared to endorse an antisemitic post.

Musk later apologized for his antisemitic post but then slammed the advertisers for boycotting his company.

“If somebody is going to try to blackmail me with advertising? Blackmail me with money? Go fu** yourself. Go. Fu**. Yourself,” Musk said in an interview at The New York Times Dealbook Summit in November.

Musk later acknowledged that the advertiser boycott could “kill the company.”

“What this advertising boycott is going to do, it’s gonna kill the company. And the whole world will know that those advertisers killed the company,” Musk said at the same event.

Even when he ever so briefly acknowledged a minutia of his own culpability in losing advertisers, he then turned it back on those same advertisers, making it all their fault.

Musk is a firm believer that Musk can do no wrong. Ever. And sadly enough, this tactic generally works for him.

Is Twitter dying? Unless a substantial competitor shows up, the answer is no. While advertising is down, Insider Intelligence predicts ad spending on X in 2024 will be only 4.3 percent less than in 2023, a much smaller decline than last year.

Ad spending on other social networks is predicted to go up by 10-20%. Are advertisers leaving X for LinkedIn and Meta? Possibly, but it’s still too soon to tell.

As a small advertiser, it all comes down to locating the place where it’s most cost effective to find your ideal customer, whether that’s X or elsewhere.