Fidelity Investments has drastically reduced its valuation of Elon Musk’s social media platform, X (formerly Twitter), by an astonishing 79%. The asset management firm now estimates its stake in the platform is worth approximately $4.19 million, a dramatic decline from its original investment of $19.66 million. This news emerges from Fidelity’s latest disclosures for its Blue Chip Growth Fund, showcasing the volatility surrounding the platform since Musk’s acquisition.
Fidelity’s valuation adjustment signifies a significant downturn in X’s market position, now estimated at a mere $9.4 billion overall. This represents a sharp decrease from the $44 billion Musk paid to acquire the platform in 2022. The reduction comes after a series of markdowns; just a few months prior, Fidelity had pegged the value of its shares in X at around $5.5 million as of the end of July. This pattern of declining valuation raises questions about the platform’s future and sustainability in a competitive social media landscape.
The 78.7% decrease in valuation underscores the challenges X faces in regaining its footing following the leadership changes and strategic shifts implemented by Musk. Industry experts suggest that factors contributing to this decline include declining user engagement, advertising revenue challenges, and increasing competition from other platforms. As X continues to navigate these turbulent waters, investors are closely monitoring its performance and potential for recovery.
Musk’s acquisition of X has sparked significant interest and scrutiny, particularly as it marks a pivotal moment in the evolution of social media. With such a steep decline in value, the future direction of the platform remains uncertain. Investors and analysts alike are left to wonder if Musk can pivot the company back to profitability or if it will continue to struggle under the weight of its diminished valuation.
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