According to Fidelity, Twitter is now only worth a third of what Elon Musk spent to buy the company, which recently reduced the value of its ownership share in the social media network.
Since Elon Musk took control of the social media network in October, Fidelity Blue Chip Growth Fund has decreased the value of its stake in Twitter a third time. The fund's stake, now held under Musk's X Holdings Corp, was valued at approximately $6.55 million as of April 28, down from $7.8 million in January and nearly $8.63 million at the end of November.
Fidelity Management & Research Company LLC (FMR) is a reputable, long-standing company with a large or medium-cap market. It makes investments in both domestic and international issuer securities.
Fidelity has been consistently downgrading its holdings in Twitter, with previous markdowns of 56% in November 2022, followed by reductions of 9.6% in December and 7.9% in February 2023.
Since Musk's acquisition, Twitter has faced financial struggles. Musk admitted to overpaying for the platform, which he purchased for $44 billion. Fidelity's latest valuation suggests that Twitter is worth just one-third of what Musk paid.
Musk has stated that Twitter is worth less than half its purchase price. The investigation is under review on how Fidelity came to its higher valuation and whether the company provided inside information to the company.
According to Bloomberg Billionaires Index, based on Fidelity's valuation, Musk's investment in Twitter is currently valued at $8.8 billion. Elon Musk's net worth now stands at $190 billion, and the index predicts a further loss of $850 million due to Fidelity's recent downgrade. Musk's wealth has climbed by over $48 billion this year despite Twitter's difficulties, primarily due to a surge in Tesla's share price.
Twitter has faced difficulties under Musk's leadership, with declining advertising revenue and challenges related to content moderation. Musk's decision to introduce Twitter Blue subscriptions has not yielded significant results, with less than 1% of monthly users signing up.
Musk has recently stated that he will step down as CEO and name former NBC Universal executive Linda Yaccarino as the new Twitter CEO in an effort to fix these problems and increase income.
Overall, Musk's net worth has decreased by Fidelity's repeated markdowns of its Twitter share as well as Twitter's financial difficulties; nevertheless, he has experienced significant increases in his overall fortune as a result of Tesla's success.
—Kritika Singhal
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