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X Is Reportedly Worth 71.5% Less Than What Musk Paid for It

X Is Reportedly Worth 71.5% Less Than What Musk Paid for It

Ivana Shteriova
Mutual fund brokerage Fidelity estimates that X (formerly Twitter) is worth around $12.5 billion. Fidelity financed Elon Musk’s X takeover with $300 million but now values the microblogging platform 71.5% less than the $44 billion it was bought for in 2022.

Fidelity’s most recent cut in X’s valuation is from November, when Musk, who considers himself a free speech absolutist, endorsed antisemitic theory and told advertisers to “go f**k” themselves” during an interview with The New York Times.

The European Union opened an investigation last month, examining X’s role in ““the dissemination of illegal content in the EU,” including spreading antisemitic content.

Last October, Fidelity investors marked down X’s value by 65%. While Fidelity didn’t explain what led to the steep drop in valuation, it could be due to an increasing number of advertisers fleeing the platform since Musk’s takeover.

Big advertisers like Disney and Apple suspended advertising on the platform after American media watchdog Media Matters revealed their ads were running alongside pro-Nazi content on X. Fidelity estimated that these events caused a 10.7% drop in X’s value solely in November.

In the same month, the stocks of other publicly traded social media platforms like Meta and Snapchat rose, possibly because these platforms seem like a “safer” space for advertisers.

The first decrease in value reported by Fidelity happened just one month after Musk’s X buyout. Since then, the mutual fund continuously decreased the platform’s value. For instance, in May 2023, Fidelity valued X at around $15 billion.

In late 2023, Musk released Grok, a rebellious AI chatbot available only to X Premium Plus subscribers. With premium features like Grok, Musk wanted to reduce the dependence on advertisers and profit from an increase in subscribers instead. However, his strategy didn’t seem to deliver the desired results – X’s value continued to sink.

News website Axios clarified that “Fidelity doesn’t necessarily have much, if any, inside information on X’s financial performance, despite being a shareholder in the privately held business,” and that others may value their X stock differently.

Musk insists that X is based on free speech absolutism, but digital hate speech watchdogs like the Center for Countering Digital Hate (CCDH) claim that hate speech and misinformation have risen dramatically since he purchased the platform.

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