Fidelity Reduces Stake in Elon Musk’s X Amid Plummeting Valuation
Fidelity Investments has significantly decreased its stake in Elon Musk’s social media platform X, formerly known as Twitter, reflecting a sharp decline in the platform’s value since Musk’s acquisition in 2022.
According to recent filings, Fidelity’s current stake in X is valued at approximately $4.19 million, which positions the company at under $10 billion— a substantial reduction from its initial $19.6 million investment. This represents a staggering 79% drop in value since Musk took over the platform.
Fidelity’s efforts to reduce its stake in X have been consistent throughout 2024. In January, the firm slashed the value of its shares by 10.2%, followed by an additional 5.7% cut in February. These actions highlight growing concerns about the platform’s financial stability and long-term potential.
Musk purchased X for $44 billion, but the site’s revenue has since fallen by 50%. Musk has attributed this decline to a “massive drop” in advertising revenue, though critics have pointed to several key factors, including significant changes in platform functionality and the amplification of misinformation.
One particularly controversial move by Musk has been allowing users previously banned for hate speech back onto the platform, a decision that has raised concerns among advertisers and contributed to the platform’s revenue struggles.
The dissatisfaction among investors is growing. Tesla investor Ross Gerber, speaking with The Washington Post in September, criticized Musk’s management of X, stating that Musk has “succeeded in ruining X” and even set a six-month deadline for Musk to improve Tesla’s stock value or risk losing his business.
“Elon’s done a tremendous amount of wealth destruction since he purchased Twitter,” Gerber remarked. “For the people who put capital into [Elon] for any amount, trying to explain to people how he lost [so much money] is not a fun conversation.”
As the platform’s financial woes continue, the question remains whether Musk can turn X around and prevent further investor discontent or if the platform’s downward trajectory will continue.
