Elon Musk made headlines when he purchased Twitter for a staggering $44 billion in 2022. However, recent financial disclosures from investment firm Fidelity reveal that the value of the social media giant has drastically plummeted. Fidelity’s documents show that X Holdings Corp, which Musk owns, has experienced a significant loss in value since the acquisition. Fidelity had invested $19.66 billion into Twitter through its Blue Chip Fund, but the current estimated value of that investment is now only $4.19 billion, a decrease of over 78%.
This decline in value is not unfamiliar to Fidelity. The investment firm’s financial disclosures demonstrate a consistent downward trend in X’s valuation. Just a year after the initial investment in 2022, the value had already decreased by 65%, and subsequent financial disclosures have shown further drops. Fidelity’s most recent valuation in July estimated the holdings at $5.5 billion. The reasons behind this depreciation are multifaceted and can be attributed to various factors.
One significant issue that Twitter faced after Musk’s acquisition was the exodus of major advertisers. Musk implemented changes that deterred regular users, allowed bots to flourish, and flooded users’ feeds with controversial content, including material associated with Nazism. Understandably, many companies did not want their advertisements to appear alongside such content or be associated with controversial individuals. Advertisers started to pull out, leading to a decline in revenue for Twitter.
Furthermore, Musk’s confrontational attitude towards advertisers did not aid in resolving this issue. In a fiery interview last year, Musk had a defiant message for those who hoped their return would save the platform: “If somebody’s going to try to blackmail me with advertising, blackmail me with money, go fuck yourself.” Clearly, this approach did not have the desired effect, and the advertisers did not come back.
In addition to the loss of advertisers, Musk’s ideological shift towards the right has also alienated the public and advertisers alike. Over the past few months, he has used his Twitter platform to tweet conspiracy theories about immigration and has financially supported a pro-Trump political action committee (PAC). These actions have not only distanced Musk from the general public but also impacted Twitter’s reputation as a neutral platform.
Another blow to Twitter’s user base came when the platform was temporarily shut down in Brazil following Musk’s dispute with a judge. While Musk initially resisted the judge’s demands, he eventually relented, but by then, millions of Brazilian users had migrated to other social media platforms. It remains uncertain if these users will return to Twitter, and their absence has undoubtedly contributed to the decline in the platform’s overall value.
It is noteworthy that while Musk has claimed to be a champion of free speech, he has made decisions that contradict this stance. For instance, X banned journalist Ken Klippenstein from the site after he published a dossier on J.D. Vance, which was obtained from Iranian hackers. The material has subsequently been blocked and deemed “potentially harmful” by the platform. This instance of censorship raises questions about Musk’s commitment to free speech and highlights the complexities involved in managing a platform like Twitter.
Interestingly, this is not the first time Twitter has become entangled in controversies surrounding leaked documents. During the 2020 presidential election, Twitter, under its previous ownership, was accused of suppressing information from Hunter Biden’s laptop. Musk regarded this as an act of censorship and seized the opportunity to purchase the company. He published lengthy “Twitter Files” that he claimed exposed collusion between top government officials and the social media platform. Fast forward four years, and Twitter, now X, is embroiled in a similar controversy, but with a different political narrative and with Musk’s company now worth considerably less than its purchase price.
In summary, Elon Musk’s acquisition of Twitter for $44 billion in 2022 has experienced a significant decline in value, as evidenced by financial disclosures from Fidelity. The platform has faced challenges like the departure of major advertisers, controversial content flooding user feeds, and Musk’s rightward political turn. Additionally, disputes with international jurisdictions and instances of censorship have contributed to alienating users. As Twitter (X) continues to grapple with these issues, it remains to be seen if it can regain its lost value and attract both users and advertisers back to the platform.
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