© Reuters
Elon Musk’s acquisition and subsequent alterations to Twitter in 2022 have led to a significant loss of advertisers and financial instability for the social media platform. According to Ebiquity, Musk’s decisions, which included dismantling the content moderation team, modifying the verification system, and reinstating banned users, have alienated advertisers. This has resulted in a struggle for lenders such as Morgan Stanley, Bank of America, and Barclays to offload the acquisition debt, potentially facing up to $2 billion in losses.
The changes introduced by Musk allowed users to enhance their post visibility for a monthly fee, regardless of the content type. This move has been met with resistance from advertisers, leading to a predicted drop in Twitter’s ad revenue for 2023 by Insider Intelligence.
Despite the turbulence at Twitter, Musk’s personal wealth has seen a substantial increase. His net worth soared by $63 billion this year alone, reaching a total of $200 billion. The growth was predominantly due to his stakes in Tesla (NASDAQ:) and SpaceX.
Musk’s financial journey began with a contentious $28,000 investment into Global Link Information Network (later Zip2), which was acquired by Compaq Computer for over $300 million during the dot-com boom. After the success of Zip2, Musk co-founded X.com, an early online bank that merged with Confinity to become PayPal (NASDAQ:). The sale of PayPal to eBay (NASDAQ:) for $1.5 billion made Musk a centimillionaire. He subsequently founded SpaceX and invested in Tesla using this wealth.
To mitigate the financial damage caused by Musk’s decisions at Twitter, CEO Linda Yaccarino is currently tasked with damage control efforts. In addition to his own investments, Musk has also received significant contributions from outside investors like Qatar’s sovereign wealth fund.
Ashlee Vance, Musk’s biographer, provided insights into his early funding sources and financial journey, which included early investor Gregory Kouri and Amazon (NASDAQ:) founder Jeff Bezos. The controversy surrounding the origin of Zip2’s seed money involves disputes between Musk, his brother Kimbal, their father Errol Musk, and Vance.
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