Elon Musk has done more damage than good since he acquired Twitter, aka X, in 2022. After the acquisition, the attempts to redo the platform to make it conducive to free speech practice. But, since he purchased the company for a historic $44 billion, Musk has been facing many bumps along the road. After the deal, the advertisers fled from the platform due to pressure from activists’ lobbying.
Elon Musk tried to compensate for the huge loss that X incurred after losing the advertising revenue. He tried to find other channels for revenue, but it has been difficult as the advertising revenue has been reducing at an alarming rate. Due to this, the value of the company is declining, and it has hit lower than what Musk bought it for after a report of a cut by Fidelity.
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Elon Musk-Owned X’s Valuation Come Down To $19 Billion
There have been several changes on Twitter, aka X since Elon Musk took over. While the changes looked promising on paper, the reality is grim with investigations, lawsuits, and declining advertising revenue. In recent times, Elon Musk’s erratic behavior and controversial stances about world issues have made advertisers pull out their advertisements which has caused a slump in the most important revenue stream of X.
Now, Fidelity, which helped Elon Musk in the acquisition of X has disclosed its cut in its holdings in X. As per a report, Fidelity has cut down 11% of the value of its holding. As per Fidelity, Musk-owned X’s value has been reduced by 71.5%, so after two years, Elon’s X is now down to $19 billion.
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X Faced A Huge Advertising Revenue Slump
Elon Musk has recently been embroiled in several controversies including interacting with an anti-Semitic post. Due to this, many advertisers including Walt Disney, IBM, Apple, and others have stopped advertising on X.
There was another report by Media Matters for America that claimed that X places the advertisements near pro-Nazi and pro-Hitler content. Due to this, Musk has caused a huge slump in his advertising revenue.
A report by Bloomberg has forecast a decline in advertising revenue from $4 billion in 2022 to $2.5 billion in 2023. While X generated $1 billion each quarter, in 2023, it was only $600 million per quarter.
As the revenue from advertising comprised 70-75% of the total revenue, the dwindling revenue via advertising is difficult to compensate for which even the billionaire has agreed upon.
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