According to Fidelity, which recently reduced the value of its ownership share in Twitter, the social-media network is now worth only one-third of what Elon Musk paid for it.
Musk admitted that he overpaid for Twitter, which he purchased for $44 billion, including $33.5 billion in equity. He recently stated that Twitter.Inc is worth less than half of what he paid for it. It’s unclear how Fidelity arrived at its new, lower assessment or whether the firm provided it with any non-public information.
Fidelity decreased the value of its Twitter stock to 44 percent of the purchase price in November. This was followed by additional price cuts in December and February.
Since Musk took charge, Twitter has struggled financially. Musk’s unpredictable decision-making and difficulties with content filtering contributed to a 50% drop in advertising revenue, Musk acknowledged in March, after saddling the company with $13 billion in debt. An attempt to recuperate those funds by selling Blue Tick subscriptions has so far failed. Less than 1% of Twitter’s monthly users had signed up by the end of March.
Twitter did not respond to a request for comment.
Musk’s stake in Twitter is now worth $8.8 billion, according to the Bloomberg Billionaires Index, which used Fidelity’s assessment to compute its value. Musk spent more than $25 billion last year to acquire an estimated 79% stake in the company.
According to the index, the recent price cut deducts nearly $850 million off Musk’s $187 billion fortune. Despite Twitter’s problems, Musk’s fortune has increased by more than $48 billion this year, owing mostly to a 63% increase in Tesla Inc.’s share price.
