Elon Musk's Social Media Platform X Faces Dramatic Valuation Decline

Elon Musk's Social Media Asset Faces Financial Turmoil

The social media platform formerly known as Twitter is worth almost 80 percent less than two years ago when Elon Musk bought it, according to estimates from investment giant Fidelity.

Current Valuation Insights

X is no longer publicly traded, having been taken private by Musk for $44 billion in October 2022. Fidelity disclosed its share value estimates in a recent filing, indicating the platform's worth has plummeted to approximately $9.4 billion, a staggering loss for investors.

Factors Driving Decline

• Ad Revenue Deterioration: Analysts attribute the dramatic valuation drop to shrinking advertising revenues, exacerbated by concerns over content management on the platform.
• Fidelity's Stance: The new estimates represent a decline of 79 percent from Fidelity's original valuation in October 2022, prompting speculation about the platform's future.

Market Reactions and Future Outlook

Some analysts, including Dan Ives, suggest that Musk overpaid for X, proposing a more realistic value of $15 billion today. Despite the financial pressures, X continues to attract a significant user base with 570 million monthly active users reported during the second quarter.

Engagement and Growth Amid Decline

While some metrics indicate a decrease in engagement—such as a reported 20 percent drop in U.S. user traffic—X's broad usage globally highlights its ongoing relevance. Furthermore, experts like Gene Munster remain optimistic about the long-term potential value of the platform, especially with the integration of AI technologies, particularly for Musk's AI startup, xAI.