Musk's Twitter Takeover Sparks Dramatic Valuation Plunge for Social Media Platform X

The valuation of social media platform X has taken a significant hit in the eyes of major investment firm Fidelity, according to multiple reports. The market value of Fidelity's shares in the private company has plummeted, reflecting the broader challenges facing the platform since Elon Musk's acquisition of Twitter.

Uncovering the Dramatic Decline in X's Valuation

Fidelity's Revised Estimate: A Staggering 79% Drop

Fidelity Blue Chip Growth Fund's shares in the private company X are now estimated to be worth $4.2 million, according to a monthly report released on Sunday. This represents a staggering 79% decline from the fund's previous estimate of $19.66 million in October 2022, when Elon Musk took over Twitter. Applying this relative decline to the total value of X when it was purchased would indicate an overall valuation of $9.4 billion, a steep drop from the $44 billion that Musk paid for Twitter.

Diverging Valuations: Other Investors May Differ

It's important to note that other companies may value their shares in X differently. TechCrunch first reported the new valuation, but the social media platform itself did not immediately respond to USA TODAY's inquiry. This suggests that the true extent of the valuation decline may not be fully known, as different investors and analysts may have varying perspectives on the platform's worth.

Contentious Relationship with Advertisers

X's relationship with advertisers has been a source of ongoing tension since Musk's acquisition of the company in 2022. The social media giant has faced a growing battle with advertisers over content moderation, with CEO Linda Yaccarino stating that advertiser boycotting has cost the company billions of dollars in revenue.

Musk's Confrontational Approach

Musk's own confrontational approach has further exacerbated the situation. When speaking at the New York Times DealBook summit last November, shortly after several major companies, including Apple, IBM, and Walt Disney, had pulled ads from X, Musk lashed out, calling the advertising boycott "blackmail" and repeatedly telling those advertisers to "(expletive) yourself."

Legal Battles over Content Moderation

The company has also found itself embroiled in legal battles over the last year, suing various groups working on content moderation. In August, X Corp. sued a group of advertisers, accusing them of conspiring to "collectively withhold billions in advertising revenue."

The Broader Implications of X's Valuation Decline

The dramatic drop in X's valuation, as reported by Fidelity, highlights the significant challenges facing the platform since Musk's acquisition. The company's contentious relationship with advertisers, Musk's confrontational approach, and the ongoing legal battles over content moderation have all contributed to this valuation decline.As the social media landscape continues to evolve, the fate of X will be closely watched by investors, industry analysts, and the broader public. The platform's ability to navigate these turbulent waters and regain the trust of advertisers and users will be crucial in determining its long-term viability and future valuation.