In a surprising turn of events, Fidelity, the renowned asset management firm, has set Twitter’s current value at a mere fraction of what Elon Musk, the visionary CEO of Tesla, paid for the company during his acquisition. The revelation, first reported by Bloomberg, has sent shockwaves through the financial world.
According to Bloomberg’s sources, Fidelity had already slashed Twitter’s value to 44% of the acquisition price in November of last year. However, further reductions were implemented in December and February, significantly diminishing Twitter’s overall valuation. The company, when approached for comment, chose to remain silent on the matter, leaving market observers puzzled.
Ever since Musk took the reins at Twitter, the company has encountered numerous financial challenges. Even Musk himself acknowledged that the acquisition cost, totaling an eye-watering $44.3 billion, including his personal investment of $33.5 billion, may have been excessive. Recent remarks from the Tesla CEO indicate that Twitter’s current value falls far short of even half the acquisition price, casting doubts on the decision.
Musk’s acquisition of Twitter also burdened the social media platform with a staggering $13 billion debt, compounded by fickle decision-making and content management issues. These setbacks dealt a severe blow to Twitter’s advertising revenue, which plummeted by an alarming 50%. To counterbalance this decline, Twitter launched its paid verification service, “Twitter Blue,” but its impact has been lackluster, failing to generate the desired results.
Examining Fidelity’s valuation through Bloomberg’s Billionaires Index, it becomes apparent that Musk’s stake in Twitter is now valued at a mere $8.8 billion. However, the report raises questions about Fidelity’s methodology for arriving at such a significantly lower valuation and whether they had access to undisclosed information from Twitter.
Looking back, Musk’s acquisition last year totaled a staggering $25 billion, securing a commanding 79% stake in Twitter. Yet, thanks to the remarkable surge in Tesla’s stock price this year, Musk’s overall assets have risen to a jaw-dropping $48 billion, an unexpected turn of events in this tumultuous saga. The implications for Twitter’s future remain uncertain, leaving investors and industry insiders anxiously awaiting further developments.