X’s Value Crashes Hard: Is Elon Musk’s Social Media Gamble Paying Off?

Elon Musk’s ambitious acquisition of X (formerly known as Twitter) seems to be losing steam rapidly, and the numbers are not pretty. According to a recent evaluation by Fidelity, the social media platform’s value has plummeted by a staggering 79% since Musk bought it in 2022. This assessment is significant, given that Fidelity was instrumental in helping Musk finance the $44 billion purchase.

Fidelity’s Assessment: How Bad Is It?

Fidelity initially valued its stake in X at $19.66 million, but its latest financial report reveals that the investment’s value has now dwindled down to just $4.19 million. This represents a jaw-dropping loss for Fidelity and suggests that X’s overall valuation has been substantially reduced. The decline follows an already troubling valuation update in January 2024, which had the platform valued at 71.5% less compared to its initial worth.

Declining Revenue and Advertiser Exodus

It’s not just the valuation that’s suffering—X’s revenue streams have taken a massive hit as well. Advertisers have been leaving the platform en masse, citing concerns over brand safety and the platform’s evolving content policies under Musk’s leadership. According to internal documents, X’s ad revenue is projected to decrease even further in 2025, suggesting that advertisers have not been swayed to return. This steady decline has contributed to a sharp drop in the platform’s earnings, putting even more pressure on Musk’s team to turn things around.

A Platform in Crisis?

X’s financial woes don’t end with revenue and valuation losses. The number of active users in key markets like the U.S. and U.K. is also on the decline. Despite Musk’s attempts to attract new users and monetize the platform through subscription models and additional features like long-form posts, user retention and engagement remain problematic.

And it’s not just the users or advertisers that X has to worry about—legal battles are cropping up as well. In Brazil, authorities are reportedly clashing with the platform over compliance and moderation policies. This adds to the growing list of headaches for the company, which also includes increased scrutiny from regulatory bodies in other countries.

What’s Next for X and Musk’s Vision?

With a valuation drop of nearly 80% and a precarious revenue situation, one might wonder if there’s a strategy in place to reverse the trend. Musk has expressed confidence in making X profitable through various new features and an emphasis on long-form content. However, many analysts remain sceptical about whether these moves will be enough to restore faith among users, advertisers, and investors alike.