Musk destroys X billions
Advertisers are pulling out, user numbers are apparently falling significantly: X is struggling with considerable difficulties following the takeover by Elon Musk. The value of the network is shrinking.
Elon Musk bought X, formerly known as Twitter, for a whopping 44 billion dollars. However, much of this has now vanished into thin air. The investment firm Fidelity massively downgraded the value of its shares in the network. They are now worth 71.5 percent less than at the time of purchase in fall 2022, meaning that X is now only worth around 12.7 billion dollars. In May, Fidelity had put the value of X at around 15 billion dollars - a third of the sum Musk had raised for the hostile takeover.
Fidelity is one of more than a dozen investors who participated in the purchase. The fund invested more than 316 million dollars. However, the company gradually reduced its stake. The investment is now valued at just under 5.6 million dollars.
In November alone, Fidelity downgraded the value by almost 11 percent. That month, Musk told advertising customers to "go fuck themselves". Since Musk took over the company, X has struggled to retain advertisers. The trigger for Musk's verbal middle finger was the announcement by large corporations, including Apple, Walt Disney and IBM, that they would be suspending advertising on X.
The background: Musk had agreed with an X user who had written in an anti-Semitic post that "Jewish communities" were inciting "hatred against white people". According to Musk, this was "the actual truth". The background to this is a far-right conspiracy theory according to which Jews are pursuing a secret plan to bring illegal migrants to Western countries in order to weaken the white majorities.
X does not come to rest
Musk later said that this was truly the "worst and stupidest post" he had ever made. He apologized for it and assured that he had been misunderstood. At the same time, he reiterated that he believes there is a problem with racism against white people.
Previously, the non-profit organization "Media Matters" had reported that advertisements from well-known brands appeared on X alongside posts glorifying Hitler and National Socialism. Musk described Media Matters as "pure evil" and announced a "thermonuclear lawsuit" against the authors.
Musk's hostile takeover of Twitter was followed by a series of abrupt changes - from mass layoffs to a change in moderation policies on hate speech, for example, to the network's verification system.
All of which drove away advertisers. The financial news agency "Bloomberg" estimates the revenue from ad sales for the past year at a total of 2.5 billion dollars. Before the turbulence triggered by Musk, this revenue would have been around 4 billion dollars. The loss of important advertising customers is a problem for Musk. If X fails, "it will be because of an ad boycott", he said at the event in New York. That would "kill" the platform.
But it's not just advertisers who are turning their backs on X, some users are too. The service itself no longer publishes information on user numbers. However, the analysis company Apptopia assumes that the daily number of users has fallen from 140 million to 121 million since the takeover.
Fidelity has no insider information about X, other investors may value the company higher or lower. However, according to Fortune magazine, X valued itself at just 19 billion US dollars when it allocated shares to employees last October.
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Investors, including Fidelity, are reevaluating their stake in X, formerly Twitter, due to its financial struggles after Elon Musk's takeover. The value of Fidelity's shares in X has decreased significantly, now worth around 5.6 million dollars, a massive drop from its initial investment of over 316 million dollars.
Despite Elon Musk's apology for his controversial statements on X and his belief in addressing racism against white people, social networks like X are experiencing a shakeup due to lost advertisers and users following his takeover.
Source: www.ntv.de
