SpaceX’s IPO Filing Shows Elon’s Twitter ‘Business Genius’ Was A Fantasy

from the turning-gold-into-lead dept

Elon Musk, business genius. When Elon Musk announced his plans to buy Twitter, some of his billionaire friends rushed to text him to say they’d throw whatever money they wanted into the deal. Larry Ellison casually offered “a billion… or whatever you recommend.” Marc Andreessen offered $250 million, no questions asked. This all came out in the lawsuit when Musk tried to back out of the deal:

Publicly, these billionaires insisted that Elon was a sure shot business genius who would easily make them much richer. Elon then sent around a presentation to other investors who would perhaps take a bit more convincing. The NY Times got its hands on Elon’s clearly pulled-out-of-his-ass projections. $26.4 billion in revenue by 2028! That included $12 billion from advertising, $10 billion from subscriptions and the rest from licensing.

Remember, at the time, Twitter’s ad revenue was decent: $4.51 billion in 2021 (its last full year as a public company) with another half a billion in licensing revenue. So Elon was suggesting he had the magic formula for massively increasing ad revenue and subscription revenue.

There was plenty of reporting over the last few years on how the opposite happened. Ad revenue absolutely tanked. It got so bad that the company started suing advertisers for not advertising on the newly renamed X (and threatening advertisers that choosing not to advertise would get them added to the lawsuit), pretending that it was some sort of antitrust violation. It took a court to point out that this was utter nonsense.

Anyway, given the private nature of X, we didn’t have any real official confirmation on some of the revenue numbers. But in the last year and a half, Elon has been merging his Xs. He merged X into xAI, then merged xAI into SpaceX. And now SpaceX has filed for a massive IPO, giving us an S1 with some financial information about how X is actually performing after all.

Of course, by merging all these companies, it gives Elon a bit of a chance to obfuscate the numbers. The user metrics, for example, show both users of X and xAI’s grok (which are not all the same). Also, somewhat ironically given Elon’s pretextual whining about how there were too many bots on Twitter, the S1 admits that a lot of the activity on X these days is almost certainly bots and they apparently have no way to break out how many humans still use the service:

“supported accounts” refers to, when used in the context of our X platform and Grok, a human, bot or similar account that logged into the X platform or Grok. The total number of supported accounts may include fake, spam or bot accounts if they are active.

Gosh. I thought you were taking over the site to get rid of all the bots and spam.

Anyhoo, now that we have some numbers, let’s compare them to what Elon sold his investors.

Remember, the plan was $26.4 billion by 2028. We’re more than halfway there. How’s it going? Well… when he combines xAI (grok) revenue with X revenue (so not even just breaking out X’s ad revenue)… we get… a total of $3.201 billion in 2025. So, just to put this in perspective… when he took over in 2022 he laid out a five year plan to take the company that had $4.5 billion in ad revenue the year before he bought it up to $12 billion in five years. Three years in and… it’s now somewhere pretty far below $3 billion. And they’re proud of the fact it’s finally started to go up again:

Revenue for the year ended December 31, 2025 increased by $581 million, or 22.2%, compared to the prior year ended December 31, 2024. This increase was primarily due to an increase in advertising revenue of $116 million as advertising spend increased from advertising partners on X and an increase in AI solutions and infrastructure revenue of $465 million.

So… from 2024 to 2025… they increased advertising revenue on X… by… $116 million, after knocking it down by somewhere in the range of $2 billion? BUSINESS GENIUS.

But, that’s okay. Part of the pitch was that he was going to get advertising to be less than 50% of Twitter’s revenue by 2028 because it was going to be replaced by a massive wave of subscription revenue. $10 billion by 2028! Musk predicted 69 million users of Twitter Blue (what became X Premium) by 2025 and 159 million in 2028. And then also another 104 million subscribers to a mysterious “X” subscription by 2028, which was not explained in the pitch. Even though this was before the rollout of ChatGPT, if we want to grant Elon credit to think he had already planned to launch an AI subscription service called “X” by then… how are we doing towards those numbers?

As of March 31, 2026, we reached approximately 6.3 million active paid subscribers, which was comprised of approximately 4.4 million X Premium and Premium+ paid subscribers and approximately 1.9 million SuperGrok, SuperGrok Heavy and SuperGrok Lite paid subscribers.

Leaving aside the Grok subscribers… they have… 4.4 million X Premium subscribers. That seems a bit short of the 69 million paid subscribers (which was almost certainly chosen because Musk is, emotionally, a 12-year-old boy). Once you combine that with the Grok subscribers (most of those plans cost significantly more than X Premium) and you get a grand total of… $365 million. Given the breakdown of X vs. Grok subscribers and the different pricing, X subscribers likely account for less than two-thirds of that revenue — call it under $250 million. That seems juuuuust a bit short of $10 billion.

His initial pitch to investors also projected that by 2028 the payments business would be bringing in over a billion dollars. It’s now 2025 and while the S1 mentions payments, it’s very much a future thing:

We plan to further broaden the value proposition of X through offerings like Money, a product we launched in beta in November 2025, which aims to expand platform utility by enabling payments and other financial services.

In the pitch to investors, the plan was to have that generating revenue by 2023. A bit behind schedule, it seems.

Also, part of the pitch was that all the debt he’d taken on would be paid back through free cash flow. He even says that by 2025 (hmm… last year…) the company would grow to $3.2 billion. Uh, not so close. Again, that almost matches the revenue number, but the cash flow was… decidedly negative. The entire AI part of the business lost over $6 billion last year. I don’t think Elon’s paying off the debt with free cash flow any time soon.

Look, obviously, forward looking projections and investor pitches are fantasies. They always are. That’s kind of the point. And also, obviously, the consumer AI/LLM race which really became a consumer phenomenon started right after Musk closed the purchase, and shifted the landscape somewhat. Also, obviously, by merging X into xAI and then merging that combined company into SpaceX, the various investors are likely to make out just fine (even if it is stacking multiple houses of cards on top of each other).

But, given how there was a group of Silicon Valley VCs and Wall Street banker types who absolutely insisted that Elon had a Midas touch and would absolutely know how to turn Twitter into revenue gold, it seems worth checking in on just how badly those plans failed. Yes, he’s been able to paper that over with mergers between companies he owns, but the actual numbers don’t lie.

So where does this leave the investors who lined up to hand Elon a few billion dollars, no questions asked? Probably fine, actually. The SpaceX IPO will almost certainly value the combined entity at a number that makes early Twitter/X investors more than whole. That’s what merging a struggling social network into a so-so AI startup into a deeply in debt (but in strong demand) rocket company will get you — the underlying failure gets laundered by the valuation of everything else in the stack.

But the operational track record is what it is. Twitter was generating $4.5 billion in ad revenue the year before Musk bought it. Three years into his five-year plan to reach $12 billion, the combined X/xAI advertising business is at somewhere under $3 billion — and that’s counting the separate AI business he launched after acquisition. The 69 million paid subscribers became 4.4 million. The $10 billion subscription business became $250 million. The payments business that was supposed to be generating revenue in 2023 just launched in beta in November 2025.

The “business genius” narrative was always doing a lot of work. Now we have the numbers. They don’t.

Filed Under: advertising, business, elon musk, ipo, projections

Companies: spacex, twitter, x, xai