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Elon Musk paid over $44 billion for Twitter, now X, knowing that the social media platform was worth nowhere near that figure. However, ever since Musk took control of the platform, the social media platform’s valuation has dipped significantly, by almost 73 percent. Even some of Musk’s initial backers, who backed his takeover bid, are now re-evaluating their investments and options.
Fidelity Mutual Funds, one of Elon Musk’s initial backers, is also reevaluating its position. Fidelity’s Blue Chip Growth Fund disclosed a 5.7 percent reduction in its position in X during February this year.
Following Musk’s $44 billion purchase in October 2022, Fidelity acquired a stake in X. As of February 29, the fund valued its position at $5.28 million, down from $5.6 million the previous month.
The continuous decrease in the value of the Blue Chip Growth Fund’s stake in X reflects a parallel decline in the company’s overall worth, given that the fund has not indicated any change in its X position.
One factor contributing to X’s struggles has been the exodus of advertisers, driven by apprehensions about the platform’s trajectory and unpredictable alterations. Despite some advertisers returning, X’s earnings from this source have notably declined.
Since Musk’s tumultuous takeover, X has tried attracting advertisers to its platform. However, as reported by Bloomberg, ad sales fell short of expectations last year, reaching approximately $2.5 billion compared to the targeted $3 billion.
Musk’s approach to content moderation underwent a drastic shift, characterized by removing a significant portion of the moderation team and implementing a crowd-sourced fact-checking system named Community Notes, which encountered challenges. Combatting spam, disinformation, and hate speech remains a formidable challenge for the platform.
The clash between Musk’s advocacy for free speech and the necessity for responsible content moderation has been evident. While he has pledged to uphold free speech principles, Musk has also consented to takedown requests and restricted content from authoritarian regimes. Achieving a delicate balance is imperative for maintaining a healthy online ecosystem.
