Elon Musk had taken over Twitter in 2022.
New Delhi:
When Elon Musk acquired X (then Twitter) in 2022 for $44 billion, he did so with the backing of a formidable group of investors, including Saudi Prince Alwaleed bin Talal, Twitter co-founder Jack Dorsey and leading Silicon Valley venture capital firms. However, under Mr Musk’s leadership, Twitter’s valuation has nosedived, leaving these investors with substantial financial losses.
Mr Musk and his group of investors have reportedly lost over $24 billion in paper value on their investment, the Washington Post reported. The value of the company has plummeted by 72 per cent since October 2022.
According to a Washington Post analysis, the eight largest initial investments have collectively lost approximately $5 billion in value since Mr Musk’s takeover. The overall stake has shed $24 billion in value, with investors like Jack Dorsey, Larry Ellison and Sequoia Capital facing significant losses.
Prince Alwaleed bin Talal, the second-largest investor in X after Mr Musk, insists on valuing his stake at $1.9 billion despite external assessments pointing to significant devaluation. The Prince attributes this confidence to X’s investments in Musk’s artificial intelligence startup, xAI, and stresses prioritising revenue growth in the platform’s future.
The deal has faced scrutiny, with the SEC investigating Mr Musk’s purchase for potential fraud. Advertisers have fled the platform due to controversies, and some investors have received subpoenas as part of the probe.
Here’s a breakdown of the largest initial investors and their losses:
- Elon Musk: -$24.12 billion
- Prince Alwaleed bin Talal (and Kingdom Holding Co.): -$1.36 billion
- Jack Dorsey: -$720 million
- Larry Ellison: -$720 million
- Sequoia Capital: -$576 million
- Vy Capital: -$504 million
- Binance: -$360 million
- Andreessen Horowitz: -$288 million
- Qatar Investment Authority: -$270 million
One of the major factors contributing to X’s financial troubles is the exodus of advertisers. Many companies have grown wary of Elon Musk’s approach to content moderation, which prioritises a more relaxed stance on free speech. However, this approach has put X at odds with regulatory bodies, leading to a suspension in Brazil over the platform’s refusal to censor certain political content.