According to a disclosure obtained by Axios, Fidelity, a mutual fund that owns a stake in X Holdings, has marked down the value of its shares by a staggering 71.5% since Musk’s purchase.
This equates to a loss of approximately $31.5 billion, bringing X’s estimated value down to $12.5 billion.
Since Musk’s takeover, X has witnessed a significant decline in its user base. In the first year alone, the number of monthly users dropped by 15%. This decline can be attributed to concerns over the rise of hate speech on the platform, leading to a loss of user trust and engagement.
One of the primary reasons for the decline in X’s value and user base is the growing concern over hate speech on the platform. Users and advertisers have raised alarming issues regarding the platform’s moderation and handling of hate speech. To address these concerns, X has made several changes, including staff cuts and reduced moderation.
European Union Warning
In September, the European Union issued a warning to Musk after a study revealed that X had the highest ratio of disinformation posts among large social media platforms. The study highlighted the platform’s struggle to combat the spread of false information and disinformation, further damaging its reputation and user trust.
Fallout from Advertising Boycott
X faced significant backlash and a boycott from major companies following Musk’s endorsement of an antisemitic conspiracy theory. The New York Times reported that several companies pulled their advertising from the platform, resulting in a substantial financial blow. Musk’s response to the boycott, telling companies to “go fuck yourself,” further exacerbated the situation and highlighted the platform’s struggle with maintaining a positive image.
Elon Musk’s actions and decisions have played a crucial role in X’s decline. Since taking over the platform, Musk has reinstated several individuals who were previously banned, including former President Donald Trump and right-wing conspiracy theorist Alex Jones. These controversial figures have further fueled the platform’s association with divisive content and disinformation.
Both Trump and Jones have faced significant legal troubles and public scrutiny. Trump is currently facing over 90 criminal charges related to the subversion of the 2020 election, retention of government secrets, and hush-money payments to Stormy Daniels. Jones recently proposed a $55 million settlement to the Sandy Hook families, who sued him for spreading lies about the 2012 school shootings. These ongoing legal battles and controversies have contributed to the negative perception surrounding X and its association with controversial figures.
Despite the decline of X and its tarnished reputation, Elon Musk remains the world’s richest man, with a net worth of $251 billion according to Forbes. The value loss of X has not significantly impacted Musk’s personal wealth, but it has raised questions about his decision-making and the long-term sustainability of the platform.
As X grapples with the fallout from its value decline and the controversies surrounding its moderation and content, the platform faces an uncertain future. Rebuilding user trust and addressing the concerns over hate speech and disinformation will be crucial for its survival and potential resurgence.