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X is "barely breaking even," Elon Musk said in a letter to employees earlier this month, The Wall Street Journal reports.
"Our user growth is stagnant, revenue is unimpressive, and we’re barely breaking even,” Musk admitted. However, he argued that "we’ve witnessed the power of X in shaping national conversations and outcomes" over the past few months.
Other platforms are adopting X’s “commitment to free speech and unbiased truth,” he said, a nod to Meta’s adoption of X's Community Notes system over official fact-checkers.
The news of X's poor financial performance comes at a crucial time for the social network’s funding. Bankers from Morgan Stanley, Barclays, and Bank of America are reaching out to investors to try to offload some of the $13 billion in debt they financed for Musk’s $44 billion 2022 takeover of the company, according to the Journal. If they want to successfully offload the debt, they’ll need to convince third-party investors of X’s long-term financial viability.
The 2022 deal has been termed by some, including one finance professor who spoke to the Journal in 2023, as one of the worst merger finance deals since the 2008 financial crisis. Lenders have struggled to get a return on their investment, at least in the short term.
Some of X's money troubles stem from an advertiser exodus that kicked off when major brands exited over having their posts displayed next to objectionable content. Musk's response: "go fuck yourself." He then sued them; the case is ongoing, and X is reportedly planning to add more defendants.
Musk’s vocal support of Donald Trump, meanwhile, drove many users to alternative platforms. Roughly 115,000 US-based web visitors deactivated their X accounts after Election Day according to internet traffic analyzer Similarweb. Bluesky saw its user base explode in 2024, with the social network expanding its users almost ninefold, from 2.89 million to 25.94 million. Meta’s Threads and open-source social network Mastodon also saw big gains.
Today, Musk appeared at a rally for the far-right political party AfD via video, where he told attendees: "It's good to be proud of German culture, German values, and not to lose that in some sort of multiculturalism that dilutes everything," Reuters reports.
As the Anti-Defamation League notes, AfD has "become an extremist, anti-immigrant party whose aim is 'to eliminate the free democratic basic order,' according to a 2023 report by the German Institute for Human Rights."
This all comes after Musk made headlines for giving a Nazi-like salute during a Trump inauguration event, which prompted some Reddit subreddits to propose a ban on X links.