Twitter valuation plummets

Market Overview
Read time 1.4 minutes

Year To Date Performances:

1. X, formerly known as Twitter, has seen its valuation plummet from $44 billion to a mere $19 billion under Elon Musk's leadership. Since Musk's acquisition and rebranding of Twitter to X, the company has grappled with a 50% reduction in ad revenue. Musk's ambitious shift from an ad-centric model to paid subscriptions has proven challenging, with less than 1% of users hopping onto the premium bandwagon, pulling in an underwhelming annual revenue of less than $120 million. Additionally, a heavy debt burden from the acquisition to the tune of $13 billion, now haunts the company, leading to staggering yearly interest obligations nearing $1.2 billion.

2. In a surprising move, the U.S. Department of the Treasury plans to borrow $776 billion in Q4 2023, trimming down from a record $1.01 trillion in the prior quarter. While this figure is still vast, it comes in slightly below the $800 billion anticipated by market experts like JPMorgan Chase strategists. This shift is noteworthy against the backdrop of the current turbulence in the global bond market. Recall a July announcement from the Treasury about increased borrowing sent bond yields skyrocketing to levels not seen since the 2007 financial crisis, hinting at a possible easing in the government's borrowing pace.

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4. Headlines

   1. AB InBev beat its revenue forecasts despite the Bud Light boycott, causing US revenues to decline.

   2. Tesla shares are down 20%; this week, the catalyst was a warning by Panasonic about declining demand for EV batteries.

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