X is now worth less than a third of what billionaire Musk paid for the company formerly known as Twitter, according to a recent estimate from investor Fidelity. The fall in value comes amid a tumultuous period at the helm of the social media giant, with staff cuts and major companies pulling their advertisements on the platform.
According to the investment giant Fidelity, the social media platform has lost 71% of its value since Elon Musk purchased it.
Drop in value
Fidelity helped Musk complete his $44 billion purchase, but a recently obtained Axios disclosure said it had marked down the value of its shares by 71.5 percent since Musk’s October 2022 acquisition.
Musk renamed Twitter X in July 2023. Fidelity’s latest estimate places the value of X at around $12.5 billion. The markdown comes amid various struggles at the social media platform since Musk’s takeover.
Twitter’s difficult year
Monthly X users have dropped by 15 percent in Musk’s first year at the helm amid concerns over rising hate speech on the platform. Fifty percent of staff has been cut, and content moderation has been reduced, along with the shuttering of international offices and the upending of the system’s verification system.
The European Union warned Musk last September that it had found that X had the largest ratio of disinformation posts of all the large social media platforms. The social media giant is also weighed down by $13 billion in debt.
Ad sales are way down
According to a recent Bloomberg News report, this cascade of abrupt changes has turned away advertisers, and 2023’s ad sales revenue is estimated to be $2.5 billion, far below the previous rate of around $1 billion per quarter.
Fidelity’s revised valuation of the social media giant covers the fallout of numerous major companies pulling advertising on X after Musk shared his approval of an anti-Semitic conspiracy theory.
According to Forbes, Musk is the world’s richest man, with a net worth of $251 billion. When he purchased Twitter, he said he was buying the social media platform “to try to help humanity.”
Since his takeover, Musk has reinstated the accounts of numerous people previously banned from the platform, including the Sandy Hook conspiracy theorist Alex Jones and former president Donald Trump.
Mass shooting conspiracy
Rightwing conspiracy theorist Jones was ordered to pay $1.5 billion to the families of Sandy Hook victims. He recently proposed to instead pay $55 million over ten years after being sued for spreading lies about the 2012 Newtown, Connecticut, school shooting.
Jones can’t avoid paying
Jones, the host of Infowars, made the offer after a Texas judge ruled that he could not invoke bankruptcy protection to avoid paying the $1.5 billion. Jones’s followers issued threats and abuse to the victims’ families.
Trump’s legal nightmare
Meanwhile, Republican frontrunner Trump is facing 91 criminal charges over four cases involving hush money paid to porn actor Stormy Daniels, efforts to overturn the 2020 election result, and the retention of classified documents. He also faces a civil lawsuit in New York over his business affairs.