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Elon Musk’s venture ‘X‘, which was formerly known as Twitter Inc., is reportedly experiencing a considerable decrease in its value. This significant drop in worth is evident in the latest estimate from investor Fidelity.

  • Investment Status: Fidelity, the firm that assisted Musk in his $44B acquisition, has slashed the value of its holding in ‘X’ by 19% in its November portfolio update for the Blue Chip Growth Fund. This marks a continuous pattern of markdowns by Fidelity since the acquisition concluded in October 2022.
  • Solid Numbers: Fidelity’s recent document stated that its current stake in ‘X’ is now worth $5.6M, down 72% from the time of the takeover. The unchanged stake in ‘X’ suggests that the entire company’s worth has also fallen by 72%.
  • Forces at Play: The decline in value comes as ‘X’ faces difficulty retaining advertisers and is burdened with a $13B debt. Since Musk took over, ‘X’ has undergone several abrupt changes which include: layoffs and closure of international offices and an overhaul of the platform’s moderation policies and verification system.
  • Consequences: These drastic changes have deterred advertisers. Reports last month estimated that 2023’s ad sales revenue would be around $2.5B, significantly less than the previous average of $1B per quarter.

The exact procedure for arriving at this lowered valuation remains undisclosed.

The markdown coincides with a particularly turbulent time for ‘X’. In November, Musk drew criticism for agreeing with a contentious post and major corporations such as Walt Disney Co. and Apple Inc. began distancing themselves from the platform.

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