Mutual fund company Fidelity has marked down its investment in X holdings — the parent company of X (formerly Twitter) owned by Elon Musk — by 71.5% from the original valuation of shares, according to a new disclosure.
Fidelity spent $19.2 million to acquire a stake in X back in October 2022. The fund manager made a valuation cut of 65% in October 2023. And now in the November 2023 disclosure, the firm has made a further cut in X’s valuation. Notably, Fidelity’s disclosures are one month behind the current date.
X has gone through quite a lot of changes in the past year, including getting a new CEO in former NBCU exec Linda Yaccarino. During an interview at the Code Conference in September 2023, Yaccarino claimed that the company would turn profitable in 2024.
The biggest challenge for the company is to convince advertisers to spend money on the platform. A lot of prominent advertisers — including Apple, Comcast/NBCUniversal, Disney, Warner Bros. Discovery, IBM, Paramount Global, Lionsgate and the European Commission — pulled out from the platform after Musk called an antisemitic conspiracy theory the “actual truth.”
Later in the month, at the DealBook Conference, he told advertisers to go fuck themselves.
“What this advertising boycott is going to do is kill the company,” Musk continued. “And the whole world will know that those advertisers killed the company, and we will document it in great detail.”
In December, Financial Times reported that X will look to appease small and medium businesses to spend ad money on the platform. X contested The New York Times’ claim that the platform will lose $75 million because of an advertiser boycott and told FT that the estimated drop will be around $10-12 million.
“Small and medium businesses are a very significant engine that we have definitely underplayed for a long time “It [was] always part of the plan — now we will go even further with it,” X told the publication.
Musk has also made controversial decisions to restore accounts of previously banned users such as conspiracy theorist Alex Jones, Kanye West, former U.S. President Donald Trump, far-right influencer Andrew Tate and right-wing academic Jordan Peterson.