Bye bye, Twitter. Hello, uh, X.

Early this week, Elon Musk announced that the social media company would rebrand to X and replace its iconic bird logo with an X (final design TBD).

He also said that tweets – the ubiquitous word for a post on Twitter – should now be referred to as x’s.

This shouldn’t come as a huge surprise. Elon has been rolling out sudden changes to Twitter since he bought the company for $44 billion. He’s laid off half its employees, introduced (and un-introduced and re-introduced) new pricing for Twitter Blue, and limited the number of tweets people can read in a day.

But why rebrand a company with as much established brand equity as Twitter? And why now?

Let’s dig in.

Want to know more about branding strategy? Watch the first lesson from Scott Galloway’s Brand Strategy Sprint when you set up a free account.

Elon wants to ditch existing brand associations as he pivots to an “everything app” like WeChat.

Elon has a vision to turn Twitter (sorry, X) into an “everything app” – in his words, a financial ecosystem where you can buy and sell “ideas, goods, services, and opportunities, powered by AI.”

The idea is modeled on China’s WeChat app, where users can chat, shop, transfer money, manage projects, share documents, and more. WeChat is dominant in China – 78% of Chinese adults use the app, compared to the 27% of U.S. adults who use Twitter.

“There’s no WeChat equivalent outside of China. You basically live on WeChat in China. If we can recreate that with Twitter, we’ll be a great success.” - Elon Musk

If you take this vision seriously, Twitter’s brand may be inherently limiting. Twitter is well-established as the world’s town square. You go there for breaking news, interactions with thought leaders, and (if you read the comments) a hefty dose of unmoderated hate speech. Huge news – like Whitney Houston’s death – has historically shown up on Twitter before the major news outlets.

But the world’s town square hasn’t been able to turn a profit since it launched in 2006. In a recent tweet, Elon said, “We’re still negative cash flow, due to (about a) 50% drop in advertising revenue plus heavy debt load.”

In a tweet on Monday, Elon confirmed that Twitter’s association with back-and-forth conversation is limiting for his vision of a financial marketplace.

“In the months to come, we will add comprehensive communications and the ability to conduct your entire financial world. The Twitter name does not make sense in that context, so we must bid adieu to the bird.” - Elon Musk

This strategy prompts a few big questions:

‍Is Musk’s vision of a financial super-app even realistic?

Many people outside his fan circles seem to say no. According to WIRED, X would have to build “a whole new financial technology infrastructure and win over regulators by overt and diligent compliance with the rules.”

User trust may also be an issue. X would have to capture significant market share from Apple Pay, which leads the mobile payments market with 48% market share. Apple has invested significantly in marketing its commitment to data privacy, while Twitter has been in the news for wide-reaching data breaches.

Getting users to switch banks is notoriously difficult. X may be facing an uphill battle in a) convincing users that they’re trustworthy enough to manage payments and b) overcoming the inertia at play in switching institutions.

Should X have been introduced as a parent company or new product, rather than a rename?

X Corp is already the holding company for Twitter. Instead of rebranding Twitter, Musk could have rolled out X as the parent company for all his ventures, using the “house of brands” framework to nestle Twitter, SpaceX, The Boring Company, Neuralink, and Tesla under a single parent company synonymous with innovation. (This is slightly more complicated that we’re making it sound, but technically possible).

Alternatively, he could have waited until Twitter had actually developed a financial services arm or wallet, and launched that under the X brand. This would have maintained Twitter’s brand equity – which experts have valued at between $4 and $20 billion – while allowing the company to expand into new product lines.

Is this whole thing actually just about ego?

The launch of Threads has challenged Twitter’s supremacy in text-based social media, with plenty of people asking if Threads will kill Twitter (and some Section founders saying it already has).

It hasn’t escaped attention that the launch of X seems slightly rushed.

X was launched with an interim logo, designed by an Elon Musk fan for a now-discontinued podcast. On Sunday evening, the X.com domain name was still just a GoDaddy holding page because it hadn’t been configured correctly.

Even the CEO’s internal message to employees about X suggests a lack of planning. She wrote that the company enjoys “moving at the speed of light,” that she and Musk plan to work across teams to keep the “entire community up to date,” and that all employees are “invited to build X with us.”

If you’ve worked at a startup, that sounds like code for, “Elon told me we were doing this two days ago – more to come!”

Want to know more about branding strategy? Watch the first lesson from Scott Galloway’s Brand Strategy Sprint when you set up a free account.