Fidelity has slashed its valuation of X, the social media platform formerly known as Twitter, by an astounding 79% since Elon Musk’s acquisition. This significant depreciation underscores the platform’s dramatic decline in market perception, now valuing it at just $9.4 billion, a fraction of the original $44 billion purchase price.
Fidelity’s Blue Chip Growth Fund, which had initially invested $19.66 million in X, now assesses its stake at approximately $4.19 million, reflecting a staggering markdown of 78.7% as of the end of August. This latest valuation highlights a consistent pattern of declining confidence in the platform since Musk took the helm. Just two months prior, Fidelity had valued its investment in X at about $5.5 million, indicating a steady drop in perceived value.
The markdown raises questions about the future of X and its ability to recapture its former status in the tech landscape. Once a dominant force in social media, the platform has faced numerous challenges since Musk’s takeover, including changes in leadership, controversial content moderation policies, and a shift in user engagement.
Analysts suggest that this dramatic decline could be attributed to various factors, including increased competition from emerging platforms, regulatory scrutiny, and the challenges of monetizing user engagement effectively. As X struggles to navigate these turbulent waters, investor confidence appears to wane.
Fidelity’s continuous reassessment of X’s value serves as a bellwether for the broader market’s sentiment towards the platform. With the tech industry evolving rapidly, stakeholders are keenly watching how X will adapt to these challenges under Musk’s leadership. The implications of this valuation cut are profound, not just for Fidelity but for the entire tech ecosystem, as investors grapple with the shifting sands of social media’s future.
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