Between the flight of advertisers and the lack of moderation, the platform, which became X, has considerably lost value since Elon Musk took control, reveals an investigation by Washington Post.
A major buyout in 2022, which is not exactly making investors happy. When billionaire Elon Musk bought the social network Twitter for the tidy sum of $44 billion in October 2022, he did not advance the money alone. The man borrowed from banks and received support from a hundred major investors such as the platform’s founder, Jack Dorsey, and Saudi Prince Alwaleed bin Talal. However, as the Washington Post revealed on Tuesday, the return on investment is much lower because the company has lost more than half of its value.
In his analysis, based on estimates from investment manager Fidelity, the eight largest initial investments that have been reported to the U.S. Securities and Exchange Commission or otherwise made public are worth about $5 billion less than when Musk bought Twitter, which became X. «With global participation (to Elon Musk ed.) and its partners have lost $24 billion in value. An evaporation of wealth that has little parallel outside the realm of economic or sectoral crashes, or devastating corporate scandals,” underlines the journalist of the Washington PostFaiz Siddiqui.
A fiasco for investors
The latter took the time to list the losses for the most well-known investors. The asset manager Fidelity, which itself invested 316 million euros during the buyout, estimates that the value of its stake has fallen by almost 72%, to 88 million dollars. Another example is that of Jack Dorsey, the co-founder of Twitter, who invested 1 billion euros: the value of his stake, in 2024, is estimated at 280 million dollars. The latter had already expressed regrets after the buyout, by the boss of Tesla, of the social network. “Elon Musk should never have bought Twitter, everything has gone wrong since then”he said in May 2023, less than a year after the acquisition of the platform.
Saudi Prince Alwaleed bin Talal invested $1.89 billion. His stake is now valued at just $280 million. The biggest loser remains Elon Musk himself. The tech mogul invested a total of $33.5 billion. However, the value of what he holds in his platform is now valued at $9.38 billion.
In addition to these investors, the banks are also grimacing. Seven major banks allowed the billionaire to borrow $13 billion, including Morgan Stanley, Bank of America and BNP Paribas. With the collapse of the social network’s value, they would have realized “the worst banking transaction since the end of the financial crisis in 2009,” revealed an article in the Wall Street Journal on August 22.
Advertiser leakage and lack of moderation
Behind these figures, there are the consequences of the policy exercised by Elon Musk on the social network. A supporter of total freedom of expression, the billionaire fired most of the platform’s moderators shortly after buying it. The increase in misinformation and sometimes controversial content has led to a flight of advertisers, fearing that their ads will be displayed near an unwelcome tweet. Among them are large groups such as Apple, Disney and IBM. Elon Musk is struggling to recreate strong ties with companies. In November 2023, during a forum organized by the New York Timeshe had encouraged advertisers who had decided to boycott X to “go fuck yourself.” That same year, X’s advertising revenue fell by 60%.
Also readElon Musk tries a charm offensive to get advertisers back on X
In early August, Elon Musk continued his standoff against some advertisers, announcing that he was filing a complaint in Texas against the Global Alliance for Responsible Media (Garm). An inter-professional group created in 2019 by the World Federation of Advertisers, whose mission is to help advertisers avoid placing their ads near illegal or harmful content. Elon Musk accuses them of deliberately organizing a boycott of X to lead to the demonetization of some of their content.
This lack of moderation continues to cause setbacks for the social network. Since last Friday, the social network X has been suspended in the largest country in Latin America, Brazil. The country is the fourth largest market for the platform in the world with 22 million users. The reason for this decision is Elon Musk’s refusal to suspend 140 accounts of right-wing activists and to appoint a legal representative for the company in the country, as requested by Brazilian judge Alexandre de Moraes. This is a new risk for the billionaire, who is losing a major target of potential consumers for advertisers.
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