Surprising absolutely no one, Elon Musk has confirmed that the social media platform formerly known as Twitter and now known as X is now worth less than half of the $44 billion he paid for it last year.
On Monday, Oct. 30, as Fortune reports, Musk awarded all the X employees he didn’t fire equity in the company, saying it was valued at $19 billion, or $45 a share. That’s a 55 percent drop in value from when Musk bought Twitter last year — and it might be an overly sunny assessment. The mutual fund company Fidelity — which contributed over $300 million to Musk’s Twitter takeover — just revealed it thinks the company is worth 65 percent less than it was last year.
The new valuation is also an entire $1 billion less than the $20 billion Musk said he thought Twitter was worth in an internal email back in March.
Musk agreed to buy Twitter for $44 billion last April, a deal that turned sour soon after because of a major downturn in the stock market that hit tech companies — like Twitter and Musk’s Tesla — especially hard. By July 2022, Twitter’s stock price had fallen from the $54.20 a share Musk had agreed to pay to about $34 a share.
Over the ensuing months, Musk tried to back out of the deal, citing concerns about spam accounts; Twitter then sued and accused Musk of wanting to terminate the deal because of the stock downturn. Twitter ultimately prevailed, and in Oct. 2022, Musk purchased the company at the original price agreed upon.
Once he got to the helm of the company, Musk totally overhauled it in ways that have, at least so far, done little to boost the valuation of the company. Musk’s schemes have included an $8 monthly subscription fee for a blue check and changing the familiar and recognizable Twitter name and bird logo to X. Recently, X started testing a new program ostensibly designed to curb spam bots that will require new users to pay $1 a year to post and interact with other posts.
On top of all that, advertisers have fled Twitter, and ad revenue has reportedly dropped 50 percent. This plummet has, maybe not so surprisingly, coincided with a surge in misinformation, conspiracy theories, antisemitism, racism, and anti-LGBTQ rhetoric on the website.