X’s Value Falls Below $10 Billion, Marking a 78.6% Decline Since Elon Musk’s Acquisition
In October 2022, Elon Musk made waves by acquiring X (formerly known as Twitter) for a massive $44 billion. However, as of mid-2024, the platform’s value has nosedived to just $9.4 billion, representing a staggering 78.6% drop in less than two years.
This decline comes from new data released by Fidelity, an asset management firm that holds shares in X. Fidelity assesses the platform’s value based on its stake in the company. When Musk originally purchased X, Fidelity invested $19.66 million. By July 2024, the value of that investment had fallen to $5.5 million. By applying the same ratio, experts now estimate that the once $44 billion platform is worth approximately $9.4 billion.
Although X is not publicly traded, Fidelity’s valuation gives the clearest picture yet of just how far the social media platform has fallen.
Financial Woes: Declining Ad Revenue and Struggling to Stay Afloat
X’s value isn’t the only thing in freefall—its advertising revenue has also seen a significant drop. According to a report by Fortune, the platform is expected to generate around $2.5 billion in ad revenue for 2023, half of what it pulled in the previous year. As the company faces these financial challenges, Musk has made several moves to reduce costs, including relocating X’s headquarters from San Francisco to Texas. He has also downsized office space, with remaining employees moving into smaller facilities.
The exodus of advertisers has been a significant concern. A Kantar survey published in early September revealed that 26% of businesses plan to cut back their advertising spend on X in the coming year. The reason? Concerns about extremist content on the platform, which they fear could harm their brand’s reputation. This rate of advertiser pullback is the highest among major global advertising platforms. Only 4% of respondents rated X as a “safe” space for their ads, while Google Ads received a much better rating, with 39% considering it a secure advertising environment.
Advertisers Leaving X: The Fallout of Policy Instability
As Gonca Bubani, a researcher at Kantar, explained to Reuters, “Over the past few years, companies have been gradually shifting their advertising away from X. Reversing this trend will be extremely difficult, especially with the platform’s frequent policy changes and instability.”
Since Musk’s takeover, X has faced turbulent times. Fidelity has been steadily downgrading the platform’s value. In May 2023, about six months after Musk acquired X, Fidelity valued the company at around $15 billion. By early 2024, that figure dropped again to $12 billion, before falling to its current estimated value of $9.4 billion in mid-2024.
The Struggles to Regain Stability Amid Advertiser Concerns
Part of the reason for X’s struggle is its controversial policy changes under Musk’s leadership. Since the acquisition, X has been criticized for allowing more controversial and polarizing content to flourish, leading advertisers to question the platform’s brand safety. As brands become more wary of where their advertisements are displayed, X’s ad revenue has been hit hard.
The platform’s financial troubles have resulted in further operational cutbacks. Not only has Musk moved X’s headquarters, but he has also streamlined its workforce, affecting the company’s ability to innovate and regain advertisers’ trust.
While Elon Musk has made several attempts to restructure and boost X’s profitability, the rapid decline in both platform value and advertising revenue suggests that X still faces significant challenges. Rebuilding the trust of advertisers and stabilizing the platform may take considerable time, and it remains to be seen whether X can recover from its dramatic fall.
