In a shocking revelation, asset management firm Fidelity has disclosed a 71% tumble in the value of X, formerly known as Twitter, since Elon Musk‘s takeover in October 2022.
What Happened: Fidelity reported that the value of X crashed by over 71% after Elon Musk’s acquisition, as mentioned in a recent Axios story. Musk bought the social media company for $44 billion in 2022.
Fidelity, an equity stakeholder in X, has been steadily reducing the value of its stake in the aftermath of Musk’s takeover, as reported by Reuters. In May 2023, Fidelity valued X at around $15 billion, merely one-third of Musk’s purchase price.
The year 2023 was marked by turbulence for X, particularly in relation to its ties with advertisers. Numerous companies, including Walt Disney Co DIS and IBM IBM, pulled their ads from X following a contentious post from Musk. Despite Musk’s subsequent apology, he took a shot at the advertisers for their boycotts.
During a November 2023 interview at The New York Times Dealbook Summit, Musk acknowledged that the ad boycott could potentially “kill the company.”
Why It Matters: The downfall of X began with Elon Musk’s controversial endorsement of an antisemitic post that led to major advertisers such as Disney and Warner Bros. Discovery Inc WBD pausing their campaigns on X.
Even before this incident, Musk inadvertently admitted that X’s value had dropped by 90%. His comments were made in the course of a rant against the Jewish-led civil rights organization Anti-Defamation League (ADL).
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