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Facepalm: No entrepreneur wants to see one of their investments lose over 70% of its value in just over a year, especially when they paid $44 billion for it. But that's the situation Elon Musk is facing with X / Twitter, which has been revalued by mutual fund firm Fidelity, one of the financial backers behind Musk's acquisition.
Fidelity was one of several investors that helped Musk raise the $44 billion to buy Twitter (as it still was then) last April. Axios writes that the company has cut the value of its holdings in X by a further 11% as of the end of November.
Fidelity's latest Blue Chip Growth Fund update shows it now believes Musk's company is worth 71.5% less than the $44 billion it was worth at the time of purchase. Fidelity's report suggests that X is now valued at between $12 billion and $13 billion.
The fall in value includes a 10.7% cut during November, the same month that Musk told advertisers who left X to "go f*ck yourselves" during an interview with the New York Times. The companies abandoned the platform following an investigation that showed their ads appearing next to pro-Nazi content posted by users. Musk singled out Disney boss Bob Iger specifically as the target of his anger and later removed the Disney+ app from Tesla vehicles.
Few could have imagined the sort of turmoil at Twitter that would follow Musk's acquisition. From firing thousands of employees, including large portions of the safety and moderation teams, to allowing previously banned users to return and changing the company name and logo, Musk's changes have spooked advertisers. The platform previously earned around $1 billion per quarter from ad sales, but 2023's entire ad revenue is estimated at $2.5 billion.
Musk's own actions haven't been helping assure advertisers, before launching his four-letter attack on ad partners and telling them he didn't even want them to return, the billionaire was heavily criticized for posting a positive reply to a message arguing that Jewish communities push hatred against whites. Musk later apologized for this post, calling it "perhaps one of the most foolish, if not the most foolish, thing I've ever done on the platform."