Elon Musk’s revamped social media venture, formerly known as Twitter and now operating as X, has experienced a significant decrease in its valuation. Recent internal disclosures indicate that its valuation has dropped to approximately half of its $44 billion acquisition price in 2022. According to a memo dated October 30, the per-share price, determined through recent restricted stock units granted to employees, currently stands at $45, resulting in a total valuation of around $19 billion.

Under Musk’s leadership, the platform has undergone substantial changes, including a rebranding to X, significant alterations to content policies, and a reduction in workforce by about 80%. These changes do not appear to have resonated well with the user base, resulting in nearly a 20% decrease in daily active users and a decline in advertiser appeal.

Reportedly, X has lost more than half of its advertising revenue, raising concerns about managing the company’s existing debt. The current debt includes approximately $1.2 billion in interest payments against a total debt of nearly $13 billion.

To address revenue challenges, Musk introduced a shift towards a paid subscription model. However, less than 1% of users have opted for a premium subscription, generating under $120 million in annual revenue. This slow adoption contrasts with Musk’s ambitious vision of transforming X into an all-encompassing ‘everything app,’ akin to Asian super apps like WeChat, offering various services from financial transactions to video calls.

Furthermore, amid these challenges, Musk has implemented a revenue-sharing model to reward individual content creators for their engagement on the platform. Notably, a policy change excludes revenue sharing for posts corrected by the Community Notes feature, emphasizing Musk’s commitment to prioritizing accuracy over virality. While this move aims at enhancing content quality, it poses questions about the platform’s monetization strategies in the face of declining user numbers and advertising revenue.