By Ben Emos | Thursday, October 03, 2024 | 3 min read
Elon Musk’s acquisition of X is turning into a substantial financial setback, with the company’s value plummeting by around 80% since his takeover. According to estimates from the Fidelity Blue Chip Growth Fund, X is now valued at just $9.4 billion—a steep decline from the $44 billion Musk paid for the platform in 2022.
Fidelity’s valuation is based on its remaining shares in the company, which, by the end of August, were worth only $4.2 million. This marks a 24% drop from the prior month and a sharp fall from the $19.6 million valuation at the time of Musk’s purchase.
Other estimates paint a less drastic, though still grim, picture. Wedbush Securities analyst Dan Ives told CNN that X is likely worth about $15 billion, down from an estimated $30 billion when Musk sealed the deal. Industry experts largely attribute X’s declining value to Musk’s leadership. Since taking control, he has allowed the platform to become a breeding ground for controversial content, misinformation, and conspiracy theories, leading many advertisers to pull back. This exodus has significantly impacted revenue, as brands remain wary of being associated with the platform’s current content climate.
Still, not all metrics are negative. X recently reported a 6% increase in monthly active users for the second quarter, reaching 570 million users. This sizable audience still represents potential for advertisers willing to engage with the platform despite its challenges.
Musk’s broader business legacy raises an important question: Is he a visionary entrepreneur, or did his success stem from being in the right place at the right time? Tesla’s rise is often attributed to larger market trends, particularly as governments recognized the need to back the electric vehicle (EV) industry. In 2010, Tesla benefited from a $465 million loan from the Obama Administration’s Department of Energy to develop electric sedans and battery packs. This was part of an $8 billion effort to promote fuel-efficient vehicles. However, it’s important to note that many key components in Tesla’s supply chain, including battery parts, were manufactured in China. This raises the question of whether Tesla’s success was more a product of government support and favorable market timing than solely Musk’s business acumen.
John Oliver’s recent take down of Elon Musk on Last Week Tonight covered various aspects of Musk’s influence, including his handling of major companies like SpaceX and Tesla, as well as his impact on broader technological and geopolitical issues. Oliver criticized the U.S. government’s reliance on Musk’s ventures, especially in areas like internet access via Starlink, which played a crucial role in the Ukraine war. This dependence highlighted how much control Musk wields over critical infrastructure and decision-making processes, particularly regarding the space industry and national security.
Oliver underscored the larger issues of power and control that Musk has gained through his companies. Oliver pointed out that while Musk is celebrated for revolutionizing industries like electric cars and space travel, his influence can be dangerous, especially when combined with his unpredictable leadership style and controversial management of platforms like Twitter (now X).
Musk, in response to the segment, dismissed Oliver’s critique, claiming the comedian had “sold his soul to wokeness” and no longer retained his comedic edge. The exchange highlighted the growing cultural and political polarization surrounding Musk’s public persona.
Copyright 2024 FN, NewsRoom.
