Elon Musk’s financial woes at X as revenue falls by 84%
Elon Musk’s financial headaches at X may be catching up to him—and Tesla bulls are worrying that could spell bad news for the carmaker’s investors.
Musk’s repeated outbursts against advertisers have dried up the main source of revenue for the loss-making company formerly known as Twitter. A recent decision to sue them for heeding his own advice to not buy ads on the platform hasn’t helped. At some point, he will have to provide a fresh infusion of cash to salvage his $44 billion takeover. And that might mean Musk sells Tesla stock to raise the money—hurting anyone who holds the carmaker’s shares.
“I would be expecting something between $1 and $2 billion in stock,” said Bradford Ferguson, president and chief investment officer of asset manager Halter Ferguson Financial, in comments posted to YouTube on Wednesday. This alone could cause the stock to lose between 5% and 10% of its value. “It’s a massive hole they need to plug.”
Elon Musk could not be reached by Fortune for a comment.
Ferguson based his assessment on internal second-quarter figures recently obtained by the New York Times. According to this report, X booked $114 million worth of revenue in the U.S., its largest market by far. This represented a 25% drop over the preceding three months and a 53% drop over the year-ago period.
That already sounds bad. But it gets worse. The last publicly available figures prior to Musk’s acquisition, from Q2 of 2022, had revenue at $661 million. After you account for inflation, revenue has actually collapsed by 84%, in today’s dollars. [Continue reading…]