lon Musk’s social media platform X, formerly known as Twitter, has seen its value plunge dramatically since its $44 billion purchase in 2022. According to recent disclosures from Fidelity, one of the company’s key investors, the platform’s current worth is less than a quarter of its original valuation.
Fidelity’s Blue Chip Growth Fund has marked down its stake in X by a staggering 78.7%, valuing its investment at just $4.19 million as of August 2024. This sharp reduction brings the implied total valuation of X to around $9.4 billion, highlighting a significant loss of market confidence and asset value in the platform.
When Fidelity first invested in X, it allocated approximately $19.66 million through its Blue Chip Fund, according to regulatory filings. However, the fund has been steadily reducing the value of its stake since then. Back in July, Fidelity had already slashed the value of its shares in X to roughly $5.5 million.
The ongoing decline in value is a troubling sign for Elon Musk, who acquired the company with grand ambitions to transform it into a multifaceted social media platform. Since the acquisition, X has undergone numerous changes, from rebranding and layoffs to shifts in its revenue model, none of which seem to have halted the slide in its valuation.
Industry analysts speculate that the substantial markdown by Fidelity could indicate broader concerns about X’s profitability, user engagement, and long-term viability. The company’s struggle to maintain ad revenue and its pivot towards subscription-based models have yet to prove successful in recouping its initial investmWith this latest valuation update, questions are now surfacing about whether other institutional investors might follow suit and similarly adjust their valuations downward. As the year progresses, Musk and his leadership team will likely face growing pressure to demonstrate concrete growth strategies to restore the platform’s financial health and investor confidence.
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