Musk has acknowledged he overpaid for Twitter, which he bought for $44 billion, including $33.5 billion in equity. Twitter is now worth just one-third of what Elon Musk paid for the social-media platform, according to Fidelity, which recently marked down the value of its equity stake in the company.
More recently, Musk said Twitter is worth less than half what he paid for it. It’s unclear how Fidelity arrived at its new, lower valuation or whether it receives any non-public information from the company. Fidelity first reduced the value of its Twitter stake in November, to 44 percent of the purchase price. That was followed by further markdowns in December and February.
Twitter has struggled financially since Musk took over. After saddling the company with $13 billion of debt, Musk’s erratic decision-making and challenges with content moderation led advertising revenue to decline by 50 percent, Musk said in March. An attempt to recoup that revenue by selling Twitter Blue subscriptions has so far failed to take off. At the end of March, less than 1 percent of Twitter’s monthly users had signed up.
Twitter didn’t specifically respond to a request for comment.
Musk’s investment in Twitter is now worth $8.8 billion, according to the Bloomberg Billionaires Index, which uses Fidelity’s valuation to calculate the value of his holding. Musk spent more than $25 billion to acquire an estimated 79 percent stake in the company last year.
The latest markdown erases about $850 million from Musk’s $187 billion fortune, according to the index. Despite Twitter’s issues, Musk’s wealth is up more than $48 billion this year, largely due to a 63 percent surge in Tesla Inc.’s share price.
Twitter, Inc. was an American social media company based in San Francisco, California. The company operated the social networking service Twitter. Twitter was created by Jack Dorsey, Noah Glass, Biz Stone, and Evan Williams in March 2006 and was launched that July. By 2012, more than 100 million users tweeted 340 million tweets a day, and the service handled an average of 1.6 billion search queries per day. The company went public in November 2013. By 2019, Twitter had more than 330 million monthly active users.
Twitter owner Elon Musk has said he has found a new chief executive officer (CEO) to helm the social media giant he bought last year. Linda Yaccarino, the head of advertising at NBC Universal, is said to become the next Twitter CEO.
(With inputs from agencies)
