X (formerly Twitter) valuation plummets 79% to $9.4 billion

A dramatic decline in value has hit social media platform X, formerly known as Twitter, with estimates from investment giant Fidelity revealing a staggering 79% drop since Elon Musk’s $44 billion acquisition in October 2022.

Fidelity’s Blue Chip Growth Fund valued X shares at $4.2 million, marking a 24% decrease from July’s estimates. CNN reports that the significant decline implies X’s overall worth now stands at $9.4 billion, far below Musk’s purchase price.

Key factors contributing to the decline are shrinking ad revenue, concerns over extreme content and brand safety and marketers’ plans to decrease spending on X.

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The report added that a recent Kantar survey revealed a net 26% of marketers intend to reduce X ad spending in the next year, the steepest pullback among major global ad platforms. Only 4% of advertisers believe X ads provide “brand safety,” compared to 39% at Google.

In November, Musk faced backlash from brands after embracing an antisemitic conspiracy theory, leading some to halt spending on X. Musk later apologized, but also told fleeing advertisers: “Go f**k yourself.”

Despite controversies, X remains a significant social media player under Musk’s ownership. However, Fidelity’s valuation serves as a closely watched indicator of the company’s health, sparking concerns about its financial future.

Fidelity declined to comment on individual companies, while X did not respond to requests for comment. Other investors may value X differently, but Fidelity’s estimates underscore the platform’s challenges in maintaining advertiser confidence.