Mahmoud Reza Banki’s appointment as CFO of X Corp. comes at a tumultuous time for the social media giant. Since Elon Musk’s $44 billion acquisition in 2022, X has faced a staggering 80% drop in valuation, with Fidelity estimating its worth at just $9.4 billion in 2024.
Meanwhile, daily active U.S. users and advertising revenue have also sharply declined, leading to grave concerns regarding the future of the “world’s town square.”
Banki’s arrival is the latest in a long line of appointments by Musk to try and realize his strategic vision at the company. With an impressive track record of success at other major companies and a chequered personal background, Banki’s appointment is easily among the most interesting.
Below, we’ll explore how this move could shape X’s path forward amid intense competition and internal restructuring.
Who is Reza Banki?
(Mahmoud) Reza Banki brings a wealth of executive experience in finance, strategy, and operations, with an impressive track record across industries. Most recently, he served as Chief Financial Officer (CFO) and Chief Strategy Officer (CSO) at Tubi from 2017 to 2023. During his tenure, Tubi achieved extraordinary growth, such as:
- Revenue increased by over 50 times.
- User engagement rose by 150 times.
- The employee base expanded from 50 to 700.
- Fox Corporation acquired the company for $500 million in 2020.
Banki managed Tubi’s complex three-sided marketplace, which served content providers, advertisers, and over 70 million streaming users.
Prior to Tubi, Banki worked as a principal at Signatures Capital and Cota Capital, two San Francisco-based venture capital firms focused on SaaS startups and technology investments.
Earlier in his career, he was a consultant at McKinsey & Company, advising Fortune 500 clients on mergers and acquisitions, corporate strategy, and innovation. At McKinsey, he led initiatives across diverse industries such as pharmaceuticals, financial services, and consumer goods.
Banki’s extensive academic achievements also include:
- A double bachelor’s degree in Applied Mathematics and Chemical Engineering from UC Berkeley.
- A PhD in Chemical Engineering from Princeton University, with a focus on biotechnology.
- An MBA in Finance from UCLA Anderson School of Management.
A first-generation immigrant from Tehran, Iran, Banki arrived in the United States at the age of 18 to pursue higher education.
Notably, in 2010, Banki was convicted of charges related to violating U.S. sanctions on Iran, stemming from funds sent to him by family members. After serving 22 months in prison, his conviction on the key charges was overturned on appeal in 2013.
This legal saga ultimately culminated in a presidential pardon granted by President Donald Trump in 2020. Banki has since spoken publicly about the ordeal, emphasizing resilience and the importance of justice, as detailed on his personal website, RezaStory.com.
Reza Appointment Comes at a Time of Lows for X, Highs for Musk
As it happens, X Corp. has appointed Reza Banki as Chief Financial Officer (CFO) amid significant financial challenges. Since Elon Musk's $44 billion acquisition in October 2022, X has faced a steep decline in valuation. By September 2024, Fidelity Investments valued its stake in X at just $4.18 million (initially initial $19.66 million), implying a company valuation of approximately $9.4 billion—a nearly 80% drop from the purchase price.
User engagement has also suffered. As of October 2024, X's global monthly active users numbered 317 million, a 24% decrease from the same period in 2022.
In the U.S. alone, daily active users of X's mobile app fell nearly 20% year-over-year, reaching 27 million in February 2024.
Advertising revenue, a primary income source for X, has declined sharply. In the first half of 2023, the company reported a 40% drop in revenue compared to the same period in 2022, totaling $1.48 billion. According to some projections, the company’s advertising revenue is expected to ebb from a high of 4.73 billion in 2022 to just $2.7 billion by 2027.
This downturn has been attributed to challenges in retaining advertisers and users.
The arrival of Meta's Threads has been seen as contributing to X's decline by attracting users seeking alternatives. Threads' rapid growth, reaching over 175 million users by July 2024, has intensified competition in the already saturated social media landscape.
In contrast, Elon Musk's personal wealth has surged. Following the U.S. presidential election in November 2024, Tesla shares rose by 12%, boosting Musk's net worth by $20 billion. As of November 2024, Musk's estimated net worth stands at $308 billion, making him the world's richest individual.
His support for President-elect Donald Trump has been evident, with Musk taking on a leadership role in the proposed Department of Government Efficiency.
Banki to Stabilize the X Ship: Mission Impossible?
Banki's appointment as CFO comes at a critical juncture for X, as the company seeks to stabilize its finances and regain user trust. His extensive experience in financial strategy and operations is expected by many to play a critical role in help X navigate these challenges.
Banki's tenure at Tubi, where he oversaw significant revenue growth and a successful acquisition by Fox Corporation, suggests he possesses the strategic acumen needed to address X's financial hurdles. His expertise in scaling operations and managing complex financial structures aligns with X's current needs.
Some observers have speculated that Banki's past legal issues and subsequent presidential pardon may have influenced his selection, potentially ensuring a deeper alignment with Musk's vision.
According to some of these voices, Banki’s appointment is in line with Musk’s other recent hires at X. For example, Musk brought on Linda Yaccarino, formerly of NBCUniversal, as CEO of X, whose background in advertising is expected to help X address it's declining ad revenues.
To many, these appointments reflect Musk’s preference for individuals aligned with his broader vision for X, potentially prioritizing long-term strategic goals and personal loyalty over immediate financial performance.
However, other industry experts emphasize his professional qualifications as the primary factor. Jasmine Enberg, Vice President at Emarketer, told Reuters, "Banki's background at Tubi could also signal a growing focus on video on X."
Conclusion
As X navigates its financial restructuring, Banki's role will be pivotal in implementing strategies to restore advertiser confidence and enhance user engagement. His proven track record in driving growth and managing financial complexities positions will engender the hope that he can replicate those results at one of the world’s largest social platforms.
