Elon Musk and his X investors have seen the social media platform’s value plummet 72% — resulting in a $24 billion paper loss — since the mogul bought the company less than two years ago, according to a report.
Musk and his partners pledged $33.5 billion toward the $44 billion acquisition of the site formerly known as Twitter in October 2022 — with that initial payment now valued at $9.38 billion, the Washington Post reported.
The rest of the $44 billion was paid in loans from banks that were unable to get the debt off their balance sheets, according to a recent analysis by financial services firm Fidelity Investment, cited by the publication.
X’s financial difficulties can be attributed to an exodus of advertisers who felt uncomfortable with Musk’s free content moderation policies – which have also run afoul of authorities in Brazil who have banned the site for refusing to censor political speech.
“Elon has done tremendous wealth destruction since it bought Twitter,” Ross Gerber, who said he invested less than $1 million, told the Washington Post, adding that he now considers the stock worthless.
“For people who have capital invested in him for any amount,” Gerber said, “trying to explain to people how he lost” so much money “isn’t a fun conversation.”
Fidelity held a $19.66 million stake in Twitter before Musk bought the company.
But the firm now says the valuation is 72% less than it paid, at $5.3 million.
When Musk was assembling his group of investors, Fidelity added just over $300 million to the mogul’s $44 billion purchase.
But the 72% drop in the value of the firm’s stock puts its position at $88 million as of Friday.
Among Musk’s partners who took the biggest financial hit from their investment in the social media company is Saudi Prince Alwaleed bin Talal al Saud, who dumped his nearly $2 billion stake in Twitter in the deal that took the firm private.
According to the latest figures published by Fidelity, the Saudi king has lost $1.4 billion from his investment.
But Alwaleed told The Washington Post that he believes his stake in X is the same as it was when Musk first bought the company — $1.9 billion, which he called a “conservative” valuation.
“In our books, for my books personally, we’re underestimating [at] the entry level we came in at,” Alwaleed told the paper.
“There is no depreciation.”
Alwaleed insisted that “we are very pleased with the alliance” with Musk and that “we categorically reject any discount for [the] company.”
Jack Dorsey, the co-founder and former CEO of Twitter, invested $1 billion in X — though Fidelity put the value of his shares at just $280 million, or a loss of $720 million.
Initially backing Musk’s vision for the site, Dorsey said last year that he didn’t think Musk “acted immediately after realizing his timing was bad.”
“It all went south,” said Dorsey, who has since backed rival platform Bluesky.
Larry Ellison, the billionaire co-founder of Oracle and friend of Musk, who put in a $1 billion stake, also lost a significant chunk, according to Fidelity.
Sequoia Capital, the venture capital firm that has backed Apple, Google, Oracle and YouTube, lost $576 million on their initial $800 million investment, while Vy Capital saw its $600 million investment drop $504 million. the Fidelity analysis revealed.
Cryptocurrency exchange Binance lost $360 million; Andreessen Horowitz lost $288 million; and the Qatar Investment Authority lost $270 million, The Washington Post reported.
Dorsey, Ellison, Sequoia, Binance, Vy Capital, Andreessen Horowitz, Fidelity and the Qatar Investment Authority declined to comment.
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