Fidelity Estimates Elon Musk’s X Now Worth 80% Less Since Acquisition
The social media platform X, formerly known as Twitter, has seen its valuation plummet by nearly 80% since billionaire Elon Musk purchased it in October 2022, according to new estimates from investment firm Fidelity.
After acquiring the platform for $44 billion and taking it private, the company no longer reports publicly on its financial health. However, Fidelity, which holds a stake in X, regularly updates the value of its shares. As of the end of August, Fidelity’s Blue Chip Growth Fund estimated the shares to be worth $4.2 million—a stark drop from the $19.66 million valuation at the time of Musk’s purchase, signalling a 79% decline.
This most recent assessment also marks a 24% reduction from July’s valuation, putting X’s current overall worth at around $9.4 billion. Although other investors may value the company differently, Fidelity’s estimate offers insight into X’s struggles, particularly as it faces shrinking advertising revenue.
Ad revenue has been a consistent concern under Musk’s leadership, with many advertisers uneasy about extreme content appearing on the platform. A Kantar global survey revealed that 26% of marketers plan to cut spending on X in the coming year, citing low confidence in “brand safety” compared to competitors like Google.
Despite these challenges, X remains a significant player in the social media landscape, reporting 570 million monthly active users in Q2, a 6% increase from the previous year. However, U.S. user engagement has declined, with an 11% drop in monthly active users in August 2024 compared to the previous year, according to Similarweb.
Industry experts like Gene Munster, managing partner at Deepwater Asset Management, believe Fidelity may be undervaluing X, asserting that the platform’s data—used to power artificial intelligence ventures like Musk’s xAI—holds long-term value. Munster suggests that while the acquisition may seem like a misstep now, it could ultimately benefit Musk as AI development accelerates.