Twitter’s Transformation Into X Will Wipe Out Billions in Brand Value; Yet Another Blunder in Making?

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Elon Musk is on a killer move and this time it’s the bird with an “X” stone, will it change the game or hit the social media giant financially? Let’s get into the story in detail. 

Musk to Kill All Birds? Another Mistake?

Elon Musk in a cryptic post on Sunday announced that Twitter’s product name will be changed to “X,” and the bird logo and associated words, including “tweet,” will be removed. Well, the move may be welcomed by GenZ it will surely give a financial blow to the company. 

As per the Bloomberg report, it will wipe out anywhere between $4 billion and $20 billion in value, according to analysts and brand agencies. Twitter’s brand value is estimated at about $4 billion, according to brand valuation consulting firm Brand Finance. The company has already declined significantly in value since he purchased it for $44 billion in October. The new black “X” logo, designed by a fan over the weekend, began to appear across the site. 

In the meanwhile, New CEO Linda Yaccarino outlined the company’s vision for X to become a site for audio, video, messaging, payments, and banking. While analysts and brand agencies call the product’s renaming a mistake, Twitter is one of the most recognizable social media brands. 

Musk’s Obsession with “X”

But this is not the first time he has made such mistakes, and he is surely obsessed with the letter X. Likewise, Twitter’s parent business was renamed X Corp. He founded xAI, an AI company. 

However, other tech companies have renamed themselves in recent years, such as Google turning into Alphabet Inc. to allow different businesses within the company to grow without being tied to search. Facebook changed into Meta Platforms Inc. to emphasize the company’s commitment to the metaverse. But no one dared to change a product name, twitter is an emotion for people and a sudden move may impact the brand in the long run. 

50% of Advertisers Have Left 

With or without the name X, Twitter’s corporate brand is already intimately interwoven with Musk’s personal brand, and users and advertisers have already lost most of Twitter’s brand equity. Musk’s “ego decision” is considered “completely irrational from a business and brand point of view.”

Additionally, Twitter’s brand value is estimated at about $4 billion, according to brand valuation consulting firm Brand Finance. The firm values the Facebook brand at $59 billion and Instagram at $47.4 billion. Vanderbilt University estimates Twitter’s brand value at $15 billion to $20 billion, which is comparable to Snapchat.

Brand valuation is difficult to determine, and there’s no single approach, which is why estimates vary. Moreover, several analysts and agencies agreed that the company’s brand has already taken a significant hit since Musk’s takeover. Advertising revenue at Twitter is down more than 50% since October, Musk has said.

There is also the risk to Musk’s future goals, as building banking and payments into the app will require customer trust, which is difficult to get with a brand-new product name.