A Fidelity fund recently marked down the value of its equity stake in Twitter, signaling yet another significant decline in the company’s worth since it was acquired by Tesla and SpaceX CEO Elon Musk in October last year.
Fidelity Blue Chip Growth Fund’s stake in Twitter, now under Musk’s X Holdings Corp, was valued at about $19.66 million in October. It dropped to $7.8 million as of January 31, and down to $6.55 million as of April 28.
Musk himself has admitted that he overpaid for Twitter, which he acquired for a staggering $44 billion. His erratic decision-making, and mass layoffs, coupled with challenges in content moderation, have caused advertisers to leave en masse. In March, Musk said that Twitter is worth less than half of what he paid for it.
Fidelity’s downward revisions reflect the struggling financial state of Twitter since Musk took over. He tried to recoup some revenue through the subscription model but less than 1% of Twitter’s monthly users have signed up by the end of March. Musk has also started charging for basic API access early this year.
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Apart from firing a majority of the company, Musk has also stopped paying for most of its bills to cut costs. The company has been sued by landlords of its offices in London, New York City, and San Francisco for failure to pay rent. Filings reveal that Twitter’s outstanding bills range from approximately $40,000 to $140,000, with most of these services rendered last year.
Joele Frank, a former public relations firm for Twitter, also filed a lawsuit alleging that Twitter has failed to settle outstanding invoices since the buyout. According to the lawsuit, Twitter owes a total of $830,498 to the PR firm.
However, the fall in Twitter’s value barely dents Musk’s net worth, Twitter’s new valuation removes just $850 million from his fortune. According to the Bloomberg Billionaires Index, Musk is still worth $190 billion.
Information for this story was found via Bloomberg, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
