Mark Zuckerberg Unveils $500 Meta Quest 3 VR Headset

Mark Zuckerberg Unveils $500 Meta Quest 3 VR Headset

Source Node: 2118757

It’s been almost seven months since Elon Musk acquired Twitter for $44 billion but the tech entrepreneur has failed to invigorate the company’s fortunes. Financial services corporation Fidelity now estimate the value of the app to stand at just 33% of Musk’s purchase price.

Musk completed his famous takeover of the microblogging site in October, fulfilling his long-term desire to be the boss of Twitter.

The tech billionaire was criticized for overspending on Twitter during the acquisition. Musk paid $44 billion for Twitter, with $33.5 billion in equity. However, Musk has also acknowledged he overpaid and said it was only worth half of what he paid.

“Myself and the other investors are obviously overpaying for Twitter right now. The long term potential for Twitter in my view is an order of magnitude greater than its current value,” said Musk.

Twitter was valued at $20 billion in March by Musk himself in an email that was sent to the company’s employees.

Twitter struggles under Musk

Following Musk’s takeover, many corporations and companies cut ties with the platform. Musk’s erratic decision-making and management style is blamed on driving a host of advertisers away.

Ford, General Motors, Volkswagen, General Mills, Mondelez, Pfizer, and United Airlines are among the major corporations that paused or pulled their advertisements from Twitter due to concerns regarding hate speech and conspiracy theories.

International ad and consulting firm Interpublic, which represents American Express, Coca-Cola, Fitbit, Spotify, and dozens of other major corporations, has also stopped advertising on the platform. That cut caused Twitter to lose $24 billion. Given the recent advertiser exodus it is unsurprising that Fidelity downgraded Twitter’s value – but it remains unclear exactly how they arrived at a final valuation.

In November, Fidelity initially decreased the value of its Twitter stake to 44% of the purchase price. This was followed by subsequent markdowns in December and February.

“In 2021, Twitter generated more than 4.5 billion U.S. dollars in advertising service revenues, up from 3.2 billion U.S. dollars in the previous year,” according to Statista.

Also Read: Six Months of Twitter Under the Rule of Elon Musk

Additionally, the micro-blogging platform produced around $571 million in data licensing revenue, up from $508 million 2020.

Insider Intelligence projected “that Twitter’s 2023 ad revenues would reach $4.74 billion worldwide.” However, since Musk took charge, the market research company has cut its projection by “nearly $2 billion, to just $2.98 billion, as the app grapples with brand safety issues, confusing policies, and broken technology.”

Twitter Blue: a flop card

Twitter Blue, a subscription-based verification checkmark with various features, remains one of the most popular changes in Musk’s brief tenure.

In November, the Tesla chief introduced a feature called “Blue for $8/month,” which brought a drastic change to Twitter’s policy by providing a verification checkmark known as a Blue tick.

This feature also offers additional benefits such as the ability to edit tweets, half-ads, longer tweets, text formatting, bookmark folders, NFT profile pictures, etc.

Interestingly, though, the change has been copied by Facebook and Instagram owner Meta, whose subscription service Meta Verified lets users add a blue checkmark to their accounts.

Musk faced accusations of charging its users to cover his $44 billion, which he invested to become the boss. Despite the criticism for removing legacy checkmarks from popular accounts, Twitter Blue generated $11 million on mobile in its first three months as a new product.

The amount it has generated is slightly lower than expected, as Twitter has 368 million monthly active users worldwide.

However, Twitter is adding more features to the paid verification badge as Musk tries to develop it as a flagship product under the Twitter umbrella.

Time Stamp:

More from MetaNews