Elon Musk’s X now worth only $9 billion, investor concludes

X, a social media platform owned by billionaire Elon Musk, could now be worth less than a quarter of its mind-boggling $44 billion purchase price, a new estimate from investment giant Fidelity says.

Naturally, this staggering drop in value in less than two years raises concerns about X’s future and financial health under Musk’s ownership.

The tech mogul bought Twitter in October 2022 and soon took the platform private. The firm no longer trades publicly, but Fidelity still reports on its shares' value. That’s exactly how we know X is in deep trouble.

According to Fidelity’s latest disclosure, its shares in X were worth just $4.2 million at the end of August. That’s a 24% decline from the end of July and a staggering 79% fall from the $19.66 million Fidelity estimated those shares were worth in October 2022.

Based on this valuation, Fidelity implies that X is currently worth around $9.4 billion, a fraction of the price Musk paid to acquire the company.

Why? The drop may reflect X’s increasing inability to boost or even retain ad revenue – the platform, now lacking moderation and hosting hateful bigots, is struggling to attract major advertisers and doesn’t even publish quarterly financial metrics.

Since Musk has been in charge of X, advertisers have been constantly raising concerns about their brands being placed next to extreme content. The billionaire has made it clear he doesn’t care, but a recent global survey by Kantar found that 26% of marketers plan to reduce their spending on X next year.

“Marketers are brand custodians and need to trust the platforms they use. X has changed so much in recent years and can be unpredictable from one day to the next – it’s difficult to feel confident about your brand safety in that environment,” said Gonca Bubani, Kandar’s global thought leadership director.

However, not all agree with Fidelity’s valuation. For instance, Gene Munster, managing partner at Deepwater Asset Management, told CNN: “Fidelity was overly aggressive. They are essentially cleaning house on the investment.”

According to Munster, X’s data will be more valuable than what Musk paid for Twitter in the long run. The data from X is used to train Grok, an AI chatbot, which the analysts sees as Musk’s biggest future wealth source.