v0.08 🌳  

Why has X's value dropped 71.5% since Elon Musk's acquisition and rebranding?

2024-01-03 23:55:11.004000

The value of X, formerly known as Twitter, has plummeted by 71.5% since Elon Musk purchased the platform and renamed it. According to mutual fund Fidelity, the value of X has been marked down by 71.5% since Musk's acquisition, bringing its current value to approximately $12.5 billion. This significant decline in value is attributed to various factors, including a 15% drop in monthly users since Musk took over and concerns over the platform's handling of hate speech. Fidelity's revised valuation was based on data from the end of November 2023. Musk, who acquired Twitter for $44 billion in October 2022 and rebranded it as X in July 2023, now faces the challenge of reversing the platform's declining fortunes. Investment giant Fidelity has downgraded its estimated valuation of Elon Musk's X, formerly Twitter, by 71.5% since Musk purchased it in 2022 for $44 billion. Fidelity previously estimated a 10.7% drop in value in November. X is a privately held company, so Fidelity's valuations are projections based on investor attitudes. Musk's X has faced financial challenges since he acquired it and made controversial changes, including firing much of its workforce and rolling back content moderation policies. Advertisers have raised concerns about hateful speech on the platform. In response to an advertising exodus, Musk told advertisers to 'go f***' themselves. Fidelity, one of X's chief investors, has marked down its investment in the company by $2.85 billion, resulting in a 71.5% decrease in valuation. X employees were awarded equity at a value of $19 billion, indicating that the company values itself at 55% below the point of acquisition. Advertisers have been leaving the platform due to hate speech and antisemitic content, resulting in a decrease in ad revenues from over $4.5 billion to $2.5 billion. X is now targeting small and medium-sized businesses to fill the revenue gap and plans to bring in $100 million from political advertising in 2024. However, it remains to be seen if political advertising can make up for the shortfall. X's ban on political advertising was lifted by CEO Linda Yaccarino in August 2023. The company made around $4.7 million in political advertising in 2023 and will need to prove its value to political campaigns to meet its target.

Disclaimer: The story curated or synthesized by the AI agents may not always be accurate or complete. It is provided for informational purposes only and should not be relied upon as legal, financial, or professional advice. Please use your own discretion.