What’s going on here?

Subscribers trickled in slowly at X (formerly Twitter) last quarter, showing that the signature bird logo isn’t the only attribute Elon Musk left behind.

What does this mean?

X counted 251 million daily users last quarter, a rise of just 1.6% from the same period the year before. That’s not great compared to the double-digit uptick seen before Musk took the company private in October 2022. And it’s not just new users keeping their distance. The company is also having issues with advertisers – largely, them scarpering because of Musk’s often out-there views. So with all those woes, it’s likely that X is struggling to pick up profit.

Why should I care?

Zooming in: Not short of a buck or two.

Forbes estimated that Musk’s stake in X is now worth nearly 70% less than the $44 billion he paid for it, based on investor Fidelity’s company valuation from December 2023. Still, Musk isn’t exactly counting the pennies: he was awarded a historic $56 billion paycheck from Tesla last month. Musk also owns a roughly 42% stake in SpaceX, which is now worth around $200 billion. No wonder word on the street is that he used some of those shares to help buy X.

The bigger picture: Elbows out.

Threads – owned by Meta – popped up a year ago to challenge X, with a simple sign-up process for existing Instagram accounts. That helped the platform become the fastest-growing app ever, with 100 million users signing up in the first week. Now, Threads only sees around 38 million active users a day. But after launching in Europe in December and winning an ally in Taylor Swift when she joined earlier this year, the platform’s short-text format is still biting at X’s heels. That said, it was a newcomer called Noplace – another text-based updates app – that topped the App Store after launching last week.

What’s going on here?

Passive funds got the better of their actively managed peers in the first half of the year, with the steady-handed approach pulling ahead again.

What does this mean?

Active funds do what they say on the tin: they’re actively managed (so they have higher costs), and they hope to outperform a specified index or market. Passive funds, meanwhile, only aim to match those returns. But “hope” is the key word back there. In the first half of this year, only around 18% of actively managed mutual and exchange-traded funds linked to the S&P 500 outperformed it. That’s down from just shy of 20% in 2023. In fact, over the past decade, only a little more than a quarter of actively managed funds benchmarked to the S&P 500 managed to come out above the index.

Why should I care?

Zooming in: Not-so-Big Tech.

The three biggest firms in the S&P 500 – Microsoft, Nvidia, and Apple – make up around 27% of its total value. But some active fund managers are restricted from holding such a “concentrated risk” and encouraged to diversify instead. That partly explains why actively managed US stock funds only have around 14% of their weighting tied up in their three biggest stocks. And without so much space for the heavy hitters, they’ve been trailing behind the passive funds that copy the S&P 500’s weighting.

The bigger picture: Playing it safe.

Interest rate cuts are expected later this year, which should make it cheaper for companies both big and small to borrow money and spur on business. That could level the playing field, giving small fry the chance to catch up to hefty firms that have barely noticed higher rates. And in that case, the equally weighted S&P 500 – made up of equal chunks of companies, regardless of size – could edge past the market-capitalization-weighted version.