Musk’s decision shines a spotlight on the risks associated with rebranding. Not only can rebranding lead to a potential dispute with another trademark owner, as Randy discussed, but it can also cause a brand to lose a lot of value. Trademarks can be valuable assets, but with the rebrand, $4 to $20 billion in value vanished overnight based on estimates from analysts and brand agencies. Musk purchased Twitter for $44 billion in October. Coincidentally, the company is currently valued at between $4 billion and $20 billion.
I wonder if Musk feels like Stan when he started investing money after his decision to rebrand to X:
Probably not. When you are the richest person in the world, you are in a position to take risks, like dumping valuable intellectual property in an effort to reinvent a product. For most brand owners, any decision to rebrand needs to consider all of the pros and cons, including potential disputes and the impact the rebrand will have on the brand’s value.