Elon Musk’s $44 billion acquisition of X (formerly known as Twitter) in October 2022 has turned into a financial disaster for the billionaire and his investors. According to a new report, the value of the social media platform has dropped by an astonishing 72%, resulting in $24 billion in paper losses for Musk and his financial backers.
Musk and his investment partners initially committed $33.5 billion toward purchasing X, but the platform’s value has since dwindled to just $9.38 billion, according to an analysis cited by The Washington Post. The remaining $44 billion price tag was covered by loans from banks that have struggled to offload the debt from their balance sheets, leaving them burdened by the platform’s rapid decline.
X’s financial collapse is largely attributed to a mass exodus of advertisers, many of whom have grown uncomfortable with Musk’s hands-off approach to content moderation. His policies, which promote hate speech, have not only alienated advertisers but have also sparked legal trouble, including a recent suspension of the platform in Brazil for refusing to regulate political content.
Musk’s rebrand of Twitter into X, which he promised would revolutionize the social media space, has so far led to substantial financial losses, leaving investors questioning the future of the once-dominant platform.
