Twitter's rebranding to X wipes out up to $20bn of its value

It is rare for corporate brands to become so intertwined with everyday conversation that they become verbs. It is rarer still for the owner of such a brand to announce plans to intentionally destroy it.

On Sunday, in the middle of a quiet summer weekend, Elon Musk decreed that Twitter’s product name would be changed to “X”, and that he was getting rid of the bird logo and all the associated words, including “tweet”.

Mr Musk’s move wiped out anywhere between $4 billion and $20 billion in value, according to analysts and brand agencies.

“It took 15-plus years to earn that much equity worldwide, so losing Twitter as a brand name is a significant financial hit,” said Steve Susi, director of brand communication at Siegel & Gale.

Mr Musk, whose company has already declined significantly in value since he purchased it for $44 billion in October, announced the change on Saturday night.

By Monday morning, a new black “X” logo, designed by a fan at the weekend, began to appear across the site.

New chief executive Linda Yaccarino outlined the company’s vision for X to become a site for audio, video, messaging, payments and banking.

Analysts and brand agencies call the product’s renaming a mistake. Twitter is one of the most recognisable social media brands, said Todd Irwin, founder of brand agency Fazer.

Bird decals adorn small businesses and websites worldwide, alongside Instagram and Facebook logos.

Twitter’s popularity has also made verbs like “tweet” and “retweet” part of modern culture, used regularly to explain how celebrities, politicians and others communicate with the public, said Joshua White, assistant professor of finance at Vanderbilt University.

X will require the company to rebuild that cultural pull and linguistic consensus from scratch. But that may be part of the motivation, so users stop comparing Twitter post-takeover to what it was before.

“It’s an exceptionally rare thing – in life or in business – that you get a second chance to make another big impression,” Ms Yaccarino tweeted.

Other tech companies have renamed themselves in recent years. Google turned into Alphabet to allow different businesses within the company to grow without being tied to search.

Facebook changed into Meta Platforms to emphasise the company’s commitment to the metaverse. But the product names remained; we still google things by going to Google.

That is worth a lot. Twitter’s brand value is estimated at about $4 billion, according to brand valuation consulting company Brand Finance. The company 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 with Snapchat.

Brand valuation is difficult to determine, and there is no single approach, which is why estimates vary, said Dipanjan Chatterjee, an analyst with Forrester Research.

But several analysts and agencies agreed that the company’s brand has already taken a significant hit since Mr Musk’s takeover. Brand Finance, for example, estimates the Twitter brand lost 32 per cent of its value since last year.

As the perception of Twitter’s brand has changed, advertisers have fled. Advertisers were concerned about Mr Musk’s courting of controversy and embrace of tweeters who broke content rules.

Advertising revenue at Twitter is down more than 50 per cent since October, Mr Musk has said.

“Twitter’s corporate brand is already heavily intertwined with Musk’s personal brand, with or without the name X, and much of Twitter’s established brand equity has already been lost among users and advertisers,” said Jasmine Enberg, an analyst with Insider Intelligence.

It’s “completely irrational from a business and brand point of view”, said Allen Adamson, co-founder of the marketing and brand consulting group Metaforce.

He called it an “ego decision” on the part of Mr Musk.

“To me, it’s going to go down in history as one of the fastest unwinding of a business and brand ever.”

There is also the risk to Mr Musk’s future goals. Building banking and payments into the app will require customer trust – something that is difficult to get with a brand-new product name.

“I just think that customers outside of Musk’s sort of core fan base would really struggle to use Twitter to exchange their money,” Vanderbilt’s Mr White said.

One thing working in Mr Musk’s favour is “the Elon brand”, said Mr Irwin.

“His personal brand might be more powerful than the Twitter brand.”

Five famous companies founded by teens

There are numerous success stories of teen businesses that were created in college dorm rooms and other modest circumstances. Below are some of the most recognisable names in the industry:

Facebook: Mark Zuckerberg and his friends started Facebook when he was a 19-year-old Harvard undergraduate.
Dell: When Michael Dell was an undergraduate student at Texas University in 1984, he started upgrading computers for profit. He starting working full-time on his business when he was 19. Eventually, his company became the Dell Computer Corporation and then Dell Inc.
Subway: Fred DeLuca opened the first Subway restaurant when he was 17. In 1965, Mr DeLuca needed extra money for college, so he decided to open his own business. Peter Buck, a family friend, lent him $1,000 and together, they opened Pete’s Super Submarines. A few years later, the company was rebranded and called Subway.
Mashable: In 2005, Pete Cashmore created Mashable in Scotland when he was a teenager. The site was then a technology blog. Over the next few decades, Mr Cashmore has turned Mashable into a global media company.
Oculus VR: Palmer Luckey founded Oculus VR in June 2012, when he was 19. In August that year, Oculus launched its Kickstarter campaign and raised more than $1 million in three days. Facebook bought Oculus for $2 billion two years later.

Nick's journey in numbers

Countries so far: 85

Flights: 149

Steps: 3.78 million

Calories: 220,000

Floors climbed: 2,000

Donations: GPB37,300

Prostate checks: 5

Blisters: 15

Bumps on the head: 2

Dog bites: 1

War 2

Director: Ayan Mukerji

Stars: Hrithik Roshan, NTR, Kiara Advani, Ashutosh Rana

Rating: 2/5

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

Three ways to limit your social media use

Clinical psychologist, Dr Saliha Afridi at The Lighthouse Arabia suggests three easy things you can do every day to cut back on the time you spend online.

1. Put the social media app in a folder on the second or third screen of your phone so it has to remain a conscious decision to open, rather than something your fingers gravitate towards without consideration.

2. Schedule a time to use social media instead of consistently throughout the day. I recommend setting aside certain times of the day or week when you upload pictures or share information.

3. Take a mental snapshot rather than a photo on your phone. Instead of sharing it with your social world, try to absorb the moment, connect with your feeling, experience the moment with all five of your senses. You will have a memory of that moment more vividly and for far longer than if you take a picture of it.

THE BIO

Favourite car: Koenigsegg Agera RS or Renault Trezor concept car.

Favourite book: I Am Pilgrim by Terry Hayes or Red Notice by Bill Browder.

Biggest inspiration: My husband Nik. He really got me through a lot with his positivity.

Favourite holiday destination: Being at home in Australia, as I travel all over the world for work. It’s great to just hang out with my husband and family.

Living in...

This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.