In a stunning reversal of fortunes, Elon Musk’s social media platform, X, has witnessed a precipitous decline in value, shedding nearly 80% of its worth since its $44 billion acquisition in October 2022. According to investment firm Fidelity’s latest estimates, X’s current valuation stands at a mere $9.4 billion.
This drastic downturn has raised eyebrows, with analysts pointing to the platform’s persistent struggles in generating advertising revenue. The private status of X, which shields its financial reports from public scrutiny, only adds to the uncertainty.
Dan Ives, an analyst at Wedbush Securities, offered a scathing assessment, stating, “Musk’s acquisition price now appears grossly inflated.” This sentiment is echoed by a global survey from Kantar, which revealed that 26% of marketers intend to reduce their ad spending on X, the highest among major social media platforms.
Musk, however, remains sanguine, highlighting X’s impressive user base. “We’ve reached 570 million monthly active users in Q2 2024, representing a 6% year-over-year increase,” he noted. Yet, research by Similarweb paints a different picture, revealing a 20% drop in US traffic on X since Musk’s takeover.
READ MORE: President Tinubu Reflects On Nation’s Progress, Outlines Vision On 64th Independence Address
Gene Munster, managing partner at Deepwater Asset Management, adopts a more optimistic stance. “X’s data assets and integral role in developing Grok, the AI chatbot, will ultimately drive its value beyond the initial purchase price,” he predicted. “For real-time insights into public sentiment, X remains unparalleled – and that’s invaluable.”
As Musk navigates this tumultuous landscape, the question remains: Can X regain its footing and justify its hefty acquisition price, or will the platform continue to face significant headwinds?
The dramatic decline in X’s valuation raises important questions about the platform’s long-term viability and Musk’s vision for its future. Will the billionaire entrepreneur’s faith in X be vindicated, or will the platform’s struggles persist? Only time will tell.
Would you like more insight into X’s valuation crisis, Elon Musk’s social media strategy, or the latest developments in the tech world?
