Elon Musk's declaration of war on his own advertisers exposes a grim reality for "X", writes Fortune magazine, which quotes financier Bradford Ferguson saying he expects Musk to liquidate billions of dollars in Tesla stock to keep it in business.
"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. No one knows how much longer X can survive, since the company doesn't release financial results.
Musk admitted last year that "X", the company presently known as Twitter, could face bankruptcy soon. As one of the world's richest men, though, he can run it at a loss if he pleases to—whatever the cost to his other businesses. And Musk has often cast his acquisition of Twitter in terms that suggest he bought it for the same reasons the wealthy have always bought media outlets: not to make money but to influence politics, markets and the public.
Continually dumping Tesla shares onto an unsuspecting market, resulting in the stock plumbing two-year lows, is after all how Musk financed the bulk of Twitter's $44 billion price tag in the first place.
In December 2022, Musk promised during a Twitter Spaces discussion not to burn investors by selling any more stock to fund the troubled platform for at least another 18-24 months. "Definitely not next year under any circumstances. Probably not the year after either," he said. "You can count on me, no stock sales until 2025 or something."
Or something.
