How did Elon musk equisition of twitter have a impact on the market?


Aime
Elon Musk's acquisition of Twitter and subsequent renaming to X have had significant impacts on the market, both in terms of the company's value and its role in the social media landscape. Here are the key effects:
- Decline in Value: The value of X has fallen by 71% since Musk's purchase, according to Fidelity, the investment firm that owns a stake in X Holdings. This decline reflects the significant challenges Musk has faced in revitalizing Twitter's advertising business and maintaining user engagement1.
- User Exodus and Reduced Engagement: The acquisition led to a 15% drop in monthly active users and a 16% decrease in mobile daily active users within a year of Musk's takeover2. Academic users, in particular, were found to have abandoned the platform in significant numbers, attributing their departure to changes in moderation and the reinstatement of banned accounts3.
- Advertising Shrinkage: Advertisers have significantly reduced their spending on X/Twitter, with U.S. ad spending dropping by 54% from September 2022 to August 20232. This decline is attributed to concerns over hate speech and the platform's handling of misinformation, as well as Musk's public feud with advertisers.
- Staff Reductions and Operational Changes: Musk's takeover was accompanied by massive layoffs, with at least 50% of the staff being cut4. He also dismantled Twitter's verification system and introduced changes that led to a perceived decline in the quality of the user experience.
- Legal and Regulatory Challenges: X has faced legal challenges, including being sued by nonprofits over the spread of controversial content4. The European Union has also issued warnings about the platform's role in disseminating disinformation1.
In conclusion, Elon Musk's acquisition of Twitter has led to a significant downturn in the company's market value, user engagement, and advertising revenue. The challenges faced by X under Musk's ownership highlight the complexities of integrating such a large and sensitive platform into his broader business empire.
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