Elon Musk admits X's financial struggles in email to staff
What's the story
Elon Musk has admitted to the financial woes of his social media platform X.
In an email to employees this month, Musk said that X is barely breaking even amid stagnant user growth and unimpressive revenue.
The admission comes after banks readied a coordinated effort to sell off some of the $13 billion debt they loaned Musk for his acquisition deal, according to The Wall Street Journal.
Debt sale
Banks plan to sell off debt amid X's financial woes
Banks such as Bank of America, Barclays, and Morgan Stanley are looking to sell off a portion of the $13 billion debt they loaned Musk for his acquisition deal.
The banks are holding a lot of the debt due to poor economic conditions and Musk's legal battle over the deal.
While equity investors cut stakes by up to 78%, banks want to sell senior debt at 90-95 cents on the US Dollar while keeping more junior holdings.
Financial recovery
Financial outlook improves despite ad revenue drop
Musk's ties to Donald Trump are being leveraged by banks to lure potential investors who think X's financials are improving.
Despite a decline in ad revenue due to Musk's radical changes and the platform's political tilt, X's finances have been improving steadily.
However, nearly two years ago, Musk had predicted the company would become cash-flow positive "within months," a goal yet to be achieved as it still faces over $1 billion in annual interest payments on loans.
Platform transformation
X evolves as testing ground for Musk's AI ambitions
X is slowly turning into a playground for Musk's AI dreams.
However, even as it rolls out new features such as job listings and a video tab, there's little to show for the service Musk promised would be able to "manage someone's entire financial life" by the end of 2024.
Meanwhile, banks led by Morgan Stanley have repeatedly renewed agreements not to sell their stakes individually, hoping for a coordinated sale when X is in a better financial position.