Elon Musk’s social media company, now known as X, faces a significant downturn in its value. Recent reports indicate a stark drop in valuation, with Fidelity, a mutual fund investor involved in the acquisition, slashing its valuation by a staggering 71.5 percent from the original purchase.
The downward spiral in X’s value notably includes a 10.7 percent decrease in November, a month marked by Elon Musk’s fiery condemnation of advertisers during a New York Times event even asking them to go f themselves. His strong remarks directed at those boycotting the platform added fuel to an already blazing fire of controversies, contributing to the company’s plummeting image and investor confidence.
Comparatively, other social networking platforms like Snap and Meta (formerly Facebook) experienced significant stock increases during the same period. Snap surged by 38 percent, while Meta saw a 4.9 percent rise, further highlighting X’s struggles in a competitive market.
Fidelity was among the financiers who facilitated Elon Musk’s $44 billion purchase of the company back in October 2022. However, Axios reported a swift devaluation of the investment shortly after the acquisition, signalling growing concerns among investors.
While Fidelity’s reduced valuation sheds light on X’s declining market perception, it’s important to note that as a shareholder, it may lack intricate insights into the company’s current performance. X, no longer obligated to disclose its financial status as a publicly traded entity, remains clouded in speculation regarding the extent of its advertising losses and overall financial health.
Elon Musk’s string of controversies, including his onstage outburst during the New York Times event and concerns raised by the European Union regarding disinformation spread on the platform, has undoubtedly contributed to the company’s tumultuous journey. Accusations of endorsing antisemitic conspiracy theories further add to the cloud hovering over the company’s reputation and credibility.
The depreciating valuation, coupled with ongoing controversies surrounding Musk’s leadership and the platform’s integrity, paint a challenging landscape for X as it navigates through a pivotal phase in its existence.