Fidelity cuts X valuation by 71.5%

Mutual fund firm Fidelity has cut its investment in X Holdings, the parent company of Elon Musk-owned X (formerly Twitter), from its original stock valuation, according to new disclosures. Reduced by 71.5%.

Back in October 2022, Fidelity spent $19.2 million to acquire X’s shares. The fund manager cut X’s valuation by 65% ​​in October 2023. Now, in a November 2023 disclosure, the company has lowered X’s valuation even further. It’s worth noting that Fidelity’s disclosure was a month later than the current date.

X has gone through quite a few changes over the past year, including the appointment of former NBCU CEO Linda Yaccarino as its new CEO. In an interview at the Code Conference in September 2023, Yaccarino claimed that the company would become profitable in 2024.

The company’s biggest challenge is convincing advertisers to spend money on the platform. After Musk called anti-Semitic conspiracy theories “truth,” many high-profile advertisers — including Apple, Comcast/NBCUniversal, Disney, Warner Bros. Discovery Channel, IBM, Paramount Worldwide, Lionsgate industry and the European Commission – withdrew from the platform.

Later this month, at the Dealbook conference, he told advertisers to get lost.

“This advertising boycott will destroy this company,” Musk continued. “The world will know that those advertisers ruined this company, and we will document that in detail.”

In December, the Financial Times reported that X would seek to reassure small and medium-sized businesses to invest advertising dollars on the platform. X disputed the New York Times’ claim that the platform would lose $75 million due to the advertiser boycott, telling the Financial Times that it expected losses to be around $1-12 million.

“Small and medium-sized enterprises are a very important engine, but we have underestimated it for a long time” [was] It was always part of the plan – now we’re going to take it a step further,” X told the publication.

Musk has also made the controversial decision to reinstate the accounts of previously banned users, such as conspiracy theorist Alex Jones, Kanye West, former US President Donald Trump, far-right influencer Andrew Tate and right-wing scholar Jordan Peterson.