According to estimates by the financial conglomerate Fidelity, Twitter currently has a value equivalent to 33% of the amount Elon Musk spent to buy the social media platform.
A report released on May 29th by Fidelity Financial Services (USA) revealed that the company had adjusted downward the value of their stake in Twitter to $6.55 million. This figure is lower than the $8.63 million at the end of November last year.
Fidelity first lowered the value of their stake in November 2022 to 44% of the purchase price. They continued to make further reductions in December and January 2023. It is currently unclear how Fidelity calculated the new value of Twitter or whether they received any non-public information about the situation of Twitter.
Based on Fidelity’s actions, the Bloomberg Billionaires Index estimates that the value of Twitter is now only 33% of what Elon Musk previously paid. According to Bloomberg, Elon Musk’s stake in the social media platform is currently valued at around $8.8 billion. Musk spent over $25 billion to purchase a 79% stake in Twitter last year.
Musk had previously admitted to overpaying for Twitter. He acquired the company last year for $44 billion, using both personal funds and borrowed money. Recently, this billionaire also acknowledged that Twitter’s value is now less than half of that amount.
Twitter has faced financial troubles since Musk took over. The company had to bear a $13 billion debt from Musk’s acquisition deal. Musk’s subsequent decisions regarding personnel and content moderation also led businesses to abandon the platform, resulting in a 50% decrease in advertising revenue, as Musk stated in March. The efforts to turn the situation around by selling the Twitter Blue subscription package have so far been ineffective. By the end of March, less than 1% of Twitter’s monthly users had subscribed to this service.
Nevertheless, Musk is currently the second richest person in the world, with a fortune of $187 billion. Since the beginning of the year, the billionaire has gained over $48 billion, mainly due to the surging Tesla stock price.