Here’s why I can’t stand social media.

As we all know, Elon Musk spent $44 billion to buy Twitter, which he renamed X.

Fidelity’s Blue Chip Growth Fund, which had invested $19.66 million of that $44 billion (that’s 0.045% of the company) declared that their estimate of X’s value is now worth $5.5 million.

Of course, every mainstream media outlet pounced on this, declaring that ELON MUSK HAS LOST BILLIONS!! X IS ON ITS LAST LEGS! HOW DUMB IS TRUMP TO PUT THIS LOSER IN CHARGE OF ANYTHING!

I’m not a Finance professional, but I do have an MBA (and I have stayed at a Holiday Inn Express). There are a few things that you should know.

  1. X is a private company. That means Elon Musk can do whatever he wants with it, including telling Fidelity to take their 0.045% of the company and GFY.
  2. Elon Musk is worth $270.5 billion dollars. The $44 billion he spent on Twitter is a sunk cost. He has said himself that he did it to save free speech, which has has gone (think of all the voices that were silenced in the 2020 election that are speaking today).

    Let’s say your net worth is $200,000. If you could spend $32,000 but know that you were preserving the First Amendment, would you? Yes, it might be tough, but I think most of us would.
  3. X is a marketing machine for Musk’s companies. Musk doesn’t need to spend on Marketing for Tesla, SpaceX, the Boring Company, xAI, X, or Neurolink. All of their marketing comes from earned media through X. Facebook’s advertising budget alone is usually around $3 billion a year. If you discount everything else, the ROI on Musk’s initial investment will eventually be positive just on this alone.
  4. Fidelity has no clue. Read this article from April 2023, when Fidelity cut the valuation of its share of Reddit. Fidelity had originally valued Reddit at $10 billion in 2021, but in 2023 they slashed the valuation to $5.5 billion. Reddit had its IPO later that year, and after doing some deals with Google and AI companies, it shot up to $11 billion (and, for reasons which you’ll read in the next point, probably counting).
  5. User generated content is the new currency. Why did RDDT shoot so high? Personally, I can’t stand Reddit. Too many subreddits are dominated by petty dictatorships called moderators who routinely shut down any speech they don’t like. But because of the sheer amount of different topics that Reddit covers, it remains a huge source of original, fresh user generated content—the kind that Google loves, and the kind that AI companies need.

    What does X have? User generated content. To the tune of 500 million new posts per day. Estimates say that Reddit gets maybe 20,000 posts per day. Elon Musk is no idiot. Companies like OpenAI and Anthropic are scrambling to find sources to train their AIs. Google steals all the content from the sites it crawls for its AI, but they’ve committed to censorship.

    With X and its focus on transparency and free speech, Elon Musk has the perfect platform to train xAI.

I’m just a stupid, rinky-dink account, and yet you won’t find this analysis on any mainstream media outlet nor even any business news outlet. Why? Because it seems journalism everywhere isn’t about finding truth anymore, it’s about picking a side and becoming a cheerleader. But to those who continue to pursue truth, you’ll know that Elon Musk is no fool, and that you’d be wise to hitch your wagon to him.