Elon Musk is facing a significant setback with X / Twitter as Fidelity, a key financial supporter behind Musk's acquisition, has devalued the company by 11%, marking a total decline of 71.5% since Musk paid $44 billion for it just over a year ago. Fidelity's latest update on its Blue Chip Growth Fund places the current valuation of X between $12 billion and $13 billion, reflecting the tumultuous ride the company has experienced under Musk's ownership. The November valuation cut coincided with Musk's controversial remarks to advertisers who abandoned X after their ads were found next to pro-Nazi content. The incident led to a 10.7% reduction in X's value.
The aftermath of Musk's acquisition has seen Twitter undergo significant turmoil, including mass layoffs, rehiring previously banned users, and altering the company's name and logo. These changes have unnerved advertisers, impacting the platform's ad revenue, which is estimated to be $2.5 billion for the entire year of 2023, down from the previous $1 billion per quarter. Musk's public behavior, such as the four-letter attack on ad partners and a controversial post endorsing an anti-Semitic argument, has further strained relationships with advertisers. Musk later apologized for the post, acknowledging it as one of his most foolish actions on the platform.
The revaluation by Fidelity underscores the challenges and controversies surrounding Musk's management of X, with financial losses and advertiser dissatisfaction marking a turbulent period for the social media platform. The company's future trajectory and Musk's strategies for addressing these issues remain uncertain.