X has lost 75% of its value since Elon Musk took over

The value of social media platform X has plunged by over 75 per cent compared to when billionaire owner Elon Musk bought it two years ago. 

The information comes from a disclosure report for Fidelity’s Blue Chip Growth Fund. As of July, the fund had an equity stake in X worth $5.5 million (€4.96 million).

Originally, Fidelity invested $19.66 million (€17.73 million) when Musk purchased the social media company. Fidelity’s report puts the total valuation of X at $9.4 billion (€8.48 billion). That's less than a quarter of the $44 billion (about €39.6 billion) Musk paid for it in October 2022.

As X’s financial health continues to worsen, the company has taken cost-saving measures such as moving its main office from San Francisco, California, to Bastrop, Texas. According to the 2020 US census, the town’s total population was just 9,688.

What caused X’s value to decrease?

The value of X's shares actually increased by about 22 per cent immediately following Musk’s announcement to acquire the company, then known as Twitter.

However, share prices began to fall again following several controversial decisions by Musk: chief among them was the decision to rebrand Twitter to X, changing the company’s name and logo. 

Some experts expressed concern with the decision at the time, arguing that the Twitter brand was too recognisable to change.

Musk also completely revamped the platform’s verification system. 

Under Twitter, certain prolific users could be verified with a blue stamp next to their names. The verification system was implemented in 2009 after Tony La Russa, then-manager of the St Louis Cardinals, sued Twitter over an account that used his name to mock drunk driving deaths.

After his acquisition of the company, Musk changed verification to be subscription-based. Instead of being given to users at risk of impersonation, blue checks were used for X Premium subscribers who paid a monthly fee.

There were also grey checks that went to government-associated accounts and gold checks that businesses could purchase. The lowest cost for a gold check was originally $1,000 per month, but decreased to $200 in January 2024.

Both the changes of the social media’s verification system and branding caused controversy among users of the platform. One factor that has directly impacted X’s value is the exodus of advertisers who left the platform over concerns about content. 

In 2023, Apple, Coca-Cola, and Disney removed paid ads from X after Musk endorsed an anti-semitic post. Other companies pulled advertising due to concerns regarding hate speech and Nazi-related content on X, including the European Commission, Comcast, IBM, and the World Bank.

Why did Musk acquire Twitter?

Musk originally entered negotiations with Twitter in April 2022. He offered a value of $54.20 (€48.89) per share to purchase the company and take it private.

After several days of discussion, Twitter accepted the deal.

However, in July 2022, Musk attempted to break out of the acquisition. He claimed Twitter violated parts of their agreement by refusing to provide account data on spambots and by firing high-ranking employees and one-third of its talent acquisition team.

In response, Twitter sued Musk with the goal of forcing the transaction through. Before the trial happened that October, the billionaire changed his mind and agreed to pay the original price for Twitter’s shares. 

Musk remains the owner of X, but appointed Linda Yaccarino as CEO in May 2023. Yaccarino was previously the head of global advertising and partnerships for NBCUniversal.