Elon Musk’s social media platform X, formerly known as Twitter, is worth almost 80 percent less than two years ago when he bought it, according to estimates from investment giant Fidelity.
X no longer trades publicly after Musk shelled out $44 billion to take it private in October 2022.
However, Fidelity discloses what it believes is the value of its shares of X, and those estimates serve as a closely watched barometer for the overall health of the company.
As of the end of August, those shares were worth just $4.2 million, according to a Sunday filing by Fidelity’s Blue Chip Growth Fund.
That new estimate marks a 24 percent drop in value from what Fidelity estimated as of the end of July. And it represents a staggering decline of 79 percent from the $19.66 million that Fidelity estimated the shares were worth in October 2022 when Musk acquired Twitter.
The new valuation from Fidelity implies that it believes X is now worth just $9.4 billion — a far cry from the $44 billion that Musk paid. Other investors could value X differently.
Elon Musk “overpaid” for Twitter, now X
Analysts say Fidelity’s plunging price tag for X likely reflects shrinking ad revenue at the company, which no longer publicly releases quarterly financial metrics.
“Musk clearly overpaid for this asset,” Dan Ives, managing director and senior equity analyst at Wedbush Securities, told CNN.
Ives said that he believes Twitter was really worth around $30 billion when Musk bought it, and today it’s worth closer to $15 billion. He said that while engagement on X is “strong,” ad pressure has persisted.
Under Musk’s ownership, some advertisers have expressed concerns about extreme content on the platform that they don’t want their brands linked to.
A recent global survey by Kantar found that a net 26 percent of marketers plan to decrease their spending on X next year, the steepest pullback from any major global ad platform. Just 4% of advertisers said they think X ads provide “brand safety” (certainty that their ads won’t appear near extreme content), compared with 39% at Google.
In November, Musk faced a backlash from brands, some of which halted spending on X, after the billionaire embraced an antisemitic conspiracy theory favored by White supremacists.
Musk later apologized for what he called his “dumbest” ever social media posting. However, during that apology, Musk also told fleeing advertisers: “Go f**k yourself.”
But X continues to be a major player in social media under Musk’s ownership.
The company said it had 570 million monthly active users during the second quarter, up 6 percent from the year before.
Related: X Releases Its First Transparency Report Since Musk Took Over