According to Fidelity , social networking platform X, formerly Twitter , has lost 71% of its value since it was purchased by billionaire Elon Musk (in October 2022).
Fidelity, which owns a stake in X Holdings, told Axios that it had downgraded the value of its shares by 71.5% since Musk's purchase.
The entrepreneur bought Twitter for $44 billion in October 2022. Since then, he has brought many changes, the most significant perhaps being the change of the platform's name to X (in July 2023). Fidelity's estimate would place the value of X at around $12.5 billion.
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The number of monthly users of X fell by 15% in the first year since Musk acquired the platform , due to concerns about the increase in hate speech and racist content on the platform.
In addition, as we said, the billionaire brought many other changes that were considered controversial. Initially, shortly after the acquisition of the platform, Musk took over as CEO and fired many of the board members, as well as 50% of the staff. The staff was accompanied by problems, such as the lack of adequate oversight of Twitter's content. In September, the European Union issued a warning to Musk after finding that X had the most misinformation posts of all major social media platforms.
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The reduced value of X (Twitter) could also be a consequence of the mass withdrawal of ads from X. Many large companies have recently decided to withdraw from the platform, due to anti-Semitic posts from users and from Elon Musk himself. Musk responded to the boycott by telling companies to “go fuck themselves…” during an interview at an event in New York, but admitted that his posts were incorrect.
Elon Musk is the richest person in the world, according to Forbes, with a net worth of $251 billion. When he acquired Twitter, he said he was buying the company “to try to help humanity.”
Since taking the reins, he has made some changes to the way the platform operates and has reinstated some controversial figureswho were previously banned for violating Twitter policies (e.g. Donald Trump, Alex Jones).
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Other factors that could have led to a drop in the value of X (Twitter)
Beyond the purchase by Musk and the name change, there are several other factors that may have influenced the decline in X's value. One of them is the general economic situation.
Also, changes in the company's strategy may have affected the value of X. This may include a change in the company, a change in product or service policy, or a change in organizational structure.
Another potential impact could come from a change in the competitive environment. This could include the entry of new competitors into the market (e.g. Threads ), a change in competitors' pricing, or a change in the technology used by competitors.
Source: www.theguardian.com
