A recent report from Fidelity reveals the dramatic decline in the valuation of X, the social media platform formerly known as Twitter, which Elon Musk acquired for $44 billion in October 2022. According to Fidelity’s Blue Chip Growth Fund annual report, X’s value has plummeted to $9.4 billion, marking a staggering decrease of 78.7%.
Valuation Drop
Fidelity’s report indicated that its initial investment of $19.66 million in X prior to Musk’s takeover is now worth only $5.5 million as of July 31. This substantial markdown follows a history of decreasing valuations; in December 2022, Fidelity estimated X’s worth at $12.5 billion—71.5% less than Musk’s acquisition price. Just a month ago, in October 2023, X was valued at $19 billion.
Advertising Concerns
Adding to the platform’s challenges, a September 2024 report from analytics firm Kantar showed that 26% of marketing firms intend to reduce their advertising spending on X in the upcoming year. This represents the largest withdrawal among major social media platforms. Additionally, X received the lowest ratings for ad trustworthiness and innovation when compared to competitors like Instagram, YouTube, and TikTok.
The situation worsened in October 2023 when major brands, including Apple, IBM, and Disney, pulled their advertisements from X following an antisemitic post made by Musk. These companies were among the top advertisers on the platform, ranked eleventh, fifth, and eighth, respectively.
Conclusion
As X navigates these turbulent waters, the significant drop in its valuation and the loss of key advertising partnerships pose serious questions about its future viability and strategic direction.
