Fidelity Investments has significantly revised its valuation of X, the platform formerly known as Twitter, following Elon Musk’s acquisition. The asset management firm has reduced its estimate of X’s worth by 79%, indicating that the platform is now valued at less than a quarter of its original $44 billion purchase price.
As of the end of August, Fidelity’s Blue Chip Growth Fund valued its stake in X at approximately $4.19 million, reflecting a substantial decline from the initial investment of $19.66 million. This marks a total reduction of 78.7% in the value of Fidelity’s holdings in X, according to newly disclosed information from the fund.
This isn’t the first time Fidelity has adjusted its valuation for X. Earlier in July, the firm estimated its shares in X to be worth around $5.5 million. Such dramatic markdowns suggest that Fidelity is now valuing the entire entity of X at about $9.4 billion, significantly lower than the acquisition cost. This reduction takes into account the complex financing structure of Musk’s acquisition, which was supported by both equity and debt.
These changes in valuation reflect ongoing concerns about X’s performance and potential growth in the highly competitive social media landscape. Fidelity’s assessment highlights the challenges that have arisen since Musk took control of the platform, prompting investors to reevaluate its long-term viability and market position.
Information sourced from TechCrunch.
