According to Axios on Sunday, a mutual fund that assisted Elon Musk in purchasing X now estimates that the platform’s value is 71.5% lower than the $44 billion it was acquired for in 2022.
After Elon Musk posted comments about Jews on social media in November and encouraged advertisers to “go f**k yourselves,” Fidelity reduced the value of Musk’s social media platform by more than 10%.
In April, Fidelity provided Elon Musk with almost $300 million to aid in funding his acquisition of X; however, the mutual fund now feels that its investment is worth less than half of what it originally paid for. Fidelity investors deducted their investment’s value one month after Elon Musk bought it. The mutual fund discounted the value of its X shares by 65% in October. Although Fidelity doesn’t state clearly why it valued X at a lower price in October, a large number of big advertisers have abandoned the platform in recent months.
Elon advises Twitter staff to make the platform more like TikTok and less boring.
During this same time, Elon Musk also made his AI chatbot, Grok, available to a limited number of customers on X. Since it’s exclusive to X Premium Plus users, the addition of xAI’s top chatbot—a rival to ChatGPT—was meant to increase platform subscriptions. Musk wants to increase the number of people who subscribe to premium features like Grok in order to lessen his need on advertisements. It appears that Fidelity investors were not persuaded that Grok made a significant difference in the outcome.
In November, the stock prices of X’s publicly traded rivals, Meta and Snap, increased. Because brand safety problems associated with X are not present on Meta and Snap’s social media platforms, these platforms have become far more appealing possibilities for advertisers.
Musk says that the foundation of X was free speech absolutism, but this has drawn more attention from regulators and advertisers who are worried about hate speech on the site. In December, the European Union launched a formal investigation into X to look into the platform’s involvement in the dissemination of antisemitic material. Large sponsors such as Disney and Apple have pulled out of the site after a Media Matters investigation discovered antisemitic content on X.
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