Pipe Dream: Elon Musk Wants a $1 Trillion Market Cap for the X Platform

wccftech.com:

This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy.

It is no secret that Elon Musk wants the X social media platform to succeed. After all, he was forced to acquire the platform at a notoriously bloated valuation, earning a number of glib remarks from his detractors in the process. However, Musk's newly revealed lofty goals for X might just be too unwieldy even for the famously over-achiever CEO.

Elon thinks X could hit a $1T market cap. Do you agree? https://t.co/JBc26Ja3cq

— Sawyer Merritt (@SawyerMerritt) August 23, 2023

To wit, Elon Musk has now tweeted that a $1 trillion market cap for the X platform remains a feasible outcome.

First, Elon Musk's reference to X's market cap suggests that he eventually plans to take the platform public again.

$1T would be 40x 2023E revenue. No social media stock trades at 40x EV/Rev.
2023E EV/Rev:
- GOOG 6.3x
- META 5.6x
- SNAP 3.5x
- PINS 5.4x
- YELP 2.0x
- BIDU 1.8x
- TCEHY 4.7x
With even $5B rev (2x 2023E Rev) TWTR EV would be ~$30B at 6x Rev, less whatever debt remains.

— Gary Black (@garyblack00) August 23, 2023

But, more importantly, the question arises whether this feat commands a realistic probability. As explained by the Tesla permabull, Gary Black, in the tweet above, a $1 trillion market cap would require X to trade at a 40x 2023 Enterprise Value (EV) to Revenue multiple. However, no social media company currently trades at such lofty multiples, with even Google managing to command a mere 6.3x EV/Revenue multiple.

Of course, Elon Musk does intend to transform X into an "everything app." Here too, the odds are stacked against the desired outcome. Consider the fact that Tencent - the company behind the