The value of X, formerly Twitter, is now estimated to be less than a quarter of the $44 billion Elon Musk paid for it.
The social media platform has suffered an advertiser and user exodus sparked by concerns about both the content being allowed and the behavior of its owner.
Only last week, Musk drew the ire of some users when it was revealed that the company is diluting its Block functionality.
Plummeting Value at X
The estimated valuation has been published by Fidelity, the investment company that helped Musk buy the social network in April 2022. According to recent disclosures, as reported by TechCrunch, the company now values its stake in X at approximately $4.19 million. This is nearly an 80% drop in value.
This is also not the first time Fidelity has reported the value of its share in X Holdings tanking. In January, The Guardian reported that the company had marked down the value of its shares by 71.5% since Musk’s purchase.
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X’s Reputational Crisis
There was high drama even before Musk bought the company when the tech billionaire attempted to back out from the deal. The drama has continued, if not escalated.
Just months after he became owner, Musk rebranded the platform and announced his plan to slash 75% of the Twitter workforce, which equated to around 5500 jobs.
Musk reportedly told staff to work longer hours or he would pay them to quit. He also slashed parental leave and faced a lawsuit from disgruntled former employees.
Advertisers Running Scared at X
The storms continued as accusations of rife hate speech mounted including a charge of anti-Semitism against Musk himself. Advertisers have taken flight. Fortune reports that the company’s ad revenue declined from more than USD1 billion per quarter in 2022 to approximately USD600 million per quarter in 2023.
Musk’s reaction to the exodus didn’t calm concerns. Advertisers were targeted in an expletive-filled explosion from Musk at an event in New York. Data Firm, Kantar, reported earlier this month that advertisers continue to be wary of the platform and are showing their unease by spending their money elsewhere.
With Musk still posting tirades against everyone from presidential hopeful, Kamala Harris, to the leadership of Brazil, advertisers are not going to come flocking back and the next valuation is unlikely to see a reversal of fortune.
