WASHINGTON (dpa-AFX) - Investment firm Fidelity has reported a 71.5% drop in its stake valuation in X Holdings Corp., formerly known as Twitter, since Elon Musk's acquisition of the company in October 2022. The decrease in value is attributed to X's controversies and its struggles to attract advertisers.
Fidelity's stake valuation is considered a financial health indicator for X and reflects the sentiments of Musk's investors. Initially holding shares worth $19.66 million during Musk's takeover, Fidelity's stake sharply declined to $6.55 million last April, and it currently stands at $5.6 million, according to filings by Fidelity's Blue Chip Growth Fund.
Last year, Fidelity slightly improved its stake valuation upon Linda Yaccarino's appointment as X's new CEO.
Musk acquired X for $44 billion, and its current valuation is reported at $12.5 billion, as per an Axios report. Since Musk's takeover, X has experienced a significant drop in monthly users, and at least 50% of its staff has been laid off.
In November, X was involved in an anti-Semitism controversy, which resulted in prominent companies pulling off their advertisements from the platform. Following this, the company's annual ad sales revenue is estimated at $2.5 billion for 2023, which is far below from previous revenue of $1 billion per quarter.
Furthermore, it faced criticisms from European Union agencies over violent posts and misinformation regarding Israel-Hamas conflict.
Copyright(c) 2024 RTTNews.com. All Rights Reserved
Copyright RTT News/dpa-AFX
© 2024 AFX News
