Worth of Elon Musk’s social media platform X (formerly known as Twitter) has simply nose-dived. According to Fidelity, present value of X is about 80% less than $44 billion Musk had shelled out to buy it out in the year 2022.

Key Facts

• According to the investment firm Fidelity’s recent disclosures, worth of its stake in X has nose-dived to $4.19 million. As per this estimate value of X is paltry $9.4 billion compared to $44 billion Musk had shelled out to buy it out in October 2022.
• This investment firm has revised the value of its stake in X downwards multiple times this year: It marked down the value by 10.2% in January and another 5.7% in February.
• This investment firm’s holding in X was worth $19.6 million before Musk purchased X in October 2022 and as per its recent disclosure worth of its holding has declined by nearly 79% as of the end of August.
• $24 billion. That’s how much the eight main investors in X have lost in combined value since Musk purchased the firm, according to the WaPo.

Key Background

Musk bought what was then Twitter in October 2022 following a long-drawn-out transaction process, which included the company taking legal action against Musk after he attempted to back out of his $44 billion offer. The company’s revenue fell by 50% after his buyout owing to a “massive decline” in advertising, according to Musk. While rebranding Twitter as X, Musk announced a series of alterations to the platform: A premium subscription service that gives users verification badges, the facility to edit posts and prioritized rankings in search and conversations. Those alterations resulted in backlash from users, who felt that parody accounts could now trick users by paying for verification.

Ad pressure on X

“Musk clearly overpaid for this asset,” said Dan Ives (managing director and senior equity analyst at Wedbush Securities). Ives has shared his belief that Twitter was really worth around $30 billion when Musk purchased it, and today it’s worth about $15 billion. He said that although engagement on X is “strong,” ad pressure has continued.

Under Musk’s proprietorship, some advertisers have expressed apprehensions about extreme content on the platform that they don’t want their brands allied to. A recent global survey by Kantar found out that a net 26% of marketers plan to lessen their spending on X next year, the sharpest pullback from any major global ad platform. Paltry 4% of advertisers said they think X ads provide “brand safety”, compared with 39% at Google.