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.
They have a billion of loan payments due each year. In order to pay that, someone has to come up with cash. Having a business that actually generates a profit would be the ideal way to do that.
Their ad revenue had already been rapidly shrinking. They brought in about 1.5 billion from advertising in 2021. After Musk gutted the company, while I’m sure expenses are lower, advertising revenue has already dropped by 70-55% depending on which source you go by. So, a generous guess is $750 million now, which would make $75 million 10%, and that is a significant drop.
X was sold recently for $44 billion. $75 million is 0.17% of that. I’m sure X is quaking in its boots.
They have a billion of loan payments due each year. In order to pay that, someone has to come up with cash. Having a business that actually generates a profit would be the ideal way to do that.
My point is that $75 million isn’t a significant amount either way at the scale that X is operating on.
Their ad revenue had already been rapidly shrinking. They brought in about 1.5 billion from advertising in 2021. After Musk gutted the company, while I’m sure expenses are lower, advertising revenue has already dropped by 70-55% depending on which source you go by. So, a generous guess is $750 million now, which would make $75 million 10%, and that is a significant drop.
Part of that money was paid by X itself (as debt), devaluing it in that process.