X now worth less than 1/4th of what Elon Musk paid for it, analysts believe it to be worth less than $10bn

The value of X, formerly known as Twitter, continues to plunge, with the social media platform now worth less than 25 per cent of what Elon Musk initially paid for it. According to a recently released disclosure report from Fidelity’s Blue Chip Growth Fund, which holds a stake in the company, X’s current valuation has shrunk significantly.

When Musk acquired Twitter for a whopping $44 billion, Fidelity invested $19.66 million in the company. However, as of July 2024, Fidelity’s shares in X are now valued at just $5.5 million, putting the entire platform’s worth at a modest $9.4 billion. This sharp decrease in value represents a huge financial blow for Musk’s ambitious purchase of the social media giant.

Fidelity’s evaluation
Since X is no longer a publicly traded company, Fidelity’s report offers one of the few ways for investors and the public to gauge its current value. The firm has consistently downgraded its evaluation of the platform throughout the year. Most recently, Fidelity trimmed the valuation by 78.7 per cent, following earlier cuts in January and March. This significant drop has raised eyebrows, especially given the platform’s already shaky financial footing.

In 2023, X brought in around $2.5 billion in advertising revenue, which was approximately half of what it earned the year before in 2022. With ad sales accounting for roughly 70 per cent to 75 per cent of X’s total income, the dwindling ad revenue has further weakened the company’s financial health. This financial strain has forced X to make some tough decisions, including shutting down its San Francisco headquarters and relocating operations to Texas. The few remaining employees in California are being moved to a smaller office outside of the city, fuelling concerns over the company’s future.

A troubled future
Despite the bleak financial outlook, Musk has been attempting to rally employee morale by promising stock grants — though these would only be awarded to workers who can “prove their worth” through a written memo. However, given the history of broken promises at the company, many employees remain sceptical about the future. The move to Texas, alongside ongoing financial struggles, has done little to calm the concerns of X’s workforce.

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In addition to Fidelity, other stakeholders in X include high-profile figures like Bill Ackman and Sean “Diddy” Combs. However, Combs, a notable part-owner, is currently facing serious legal challenges, including charges of sex trafficking and abuse, which has brought further scrutiny to the company’s ownership.

As X continues to struggle under Musk’s leadership, questions remain about the platform’s long-term viability. The company has seen a massive reduction in value since the purchase, with no clear path to recovery in sight. With its declining revenue, shrinking workforce, and ongoing struggles to attract advertisers, X’s future looks more uncertain than ever.