The financial situation of the social network X continues to deteriorate, the company is taking measures to save money.
Since billionaire Elon Musk acquired the social network X two years ago, its value has fallen by more than 75%. Euronews reported this.
As of July, the fund owned $5.5 million worth of shares in Company X, according to a disclosure report for Fidelity’s Blue Chip Growth Fund. When Musk acquired the social network, Fidelity invested $19.66 million in it. The Fidelity report now puts X’s total value at $9.4 billion, less than a quarter of the $44 billion Musk paid for the social network in October 2022.
X’s financial condition continues to deteriorate and the company is taking cost-saving measures. For example, it is moving its headquarters from San Francisco, California to Bastrop, Texas.
It was noted that the value of X shares actually increased by about 22% immediately after Musk announced the acquisition of the company then known as Twitter. However, stock prices began to fall again after several controversial decisions by Musk: the main one of them was the decision to rebrand Twitter as X, that is, changing the company’s name and logo. Some experts expressed concern at the time about the decision, arguing that Twitter’s brand was too recognizable to change.
Musk also completely updated the platform’s verification system. On Twitter, some active users can be verified with a blue checkmark next to their name. After buying the company, Elon Musk changed the verification system, replacing it with a subscription. Instead of issuing blue ticks to verified users, you get them by signing up for X Premium and paying a monthly subscription fee.
Additionally, one of the factors that has directly affected the value of X is the avoidance of advertisers leaving the platform due to content concerns. Last year, Apple, Coca-Cola and Disney pulled paid advertising from X after Musk endorsed an anti-Semitic post. Other companies have pulled ads over concerns about hate speech and Nazi content on X, including the European Commission, Comcast, IBM and the World Bank.
Recall that Musk previously said that Twitter had negative cash flow due to a 50% drop in advertising revenue and a large debt load.
Source: korrespondent
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