Fidelity’s X stake fell 72% in value since Musk buy
Elon Musk’s X is now worth less than one-third of what the billionaire paid for the company formerly known as Twitter Inc., based on a recent estimate from investor Fidelity.
The firm, which helped Musk complete his $44 billion purchase, cut the value of its holding in X by 19 percent in its November portfolio update for the Blue Chip Growth Fund, compared with a September filing, according to calculations by Bloomberg. It’s the latest in a series of markdowns by Fidelity since Musk concluded the acquisition of the social media platform in October 2022, as closely held X has struggled to hold on to advertisers and is weighed down by $13 billion in debt.
Under Musk, X has faced a cascade of abrupt changes, from drastic layoffs and the shuttering of international offices to an upending of the platform’s moderation policies and verification system. The upheaval has turned off advertisers, and 2023’s revenue from ad sales is estimated to come in at $2.5 billion, far below the prior rate of roughly $1 billion per quarter, Bloomberg News reported last month.
Fidelity said in a recent document that its current stake in X was worth $5.6 million in November. That’s down 72 percent from the value of its stake at the time of the takeover. The company hasn’t disclosed any change in its stake in X, so the latest report implies the value of the entire company has also fallen by 72 percent.
It’s unclear how Fidelity arrived at its new, lower valuation or whether it receives any nonpublic information from the company. Fidelity declined to provide a statement, saying it doesn’t comment on individual investments. X didn’t respond to a request for comment.
Fidelity’s latest markdown came amid a particularly tumultuous time for X. In November, Musk unleashed a wave of criticism after he agreed with a post that said Jewish people held a “dialectical hatred” of white people, drawing a rebuke from the White House as well as several Tesla investors. At the same time major corporate spenders, including Walt Disney Co. and Apple Inc., distanced themselves from the platform. Their actions prompted Musk to lash out during an onstage interview with The New York Times, in which he told advertisers that abandoned X that they could “go [expletive]” themselves.
Axios previously reported on the Fidelity filing.