SocialL media company Twitter Inc is now worth just one third of what Elon Musk paid for the platform, according to Fidelity, which recently marked down the value of its stake in the company.
Musk, who has acknowledged he overpaid for Twitter, offered employees new equity grants earlier this year that valued the company at US$20 billion.
It’s unclear how Fidelity arrived at its new valuation or whether it received any non-public information from the company.
Fidelity first reduced the value of its Twitter stake in November, to 44% 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 US$13 billion of debt, Musk’s erratic decision-making and challenges with content moderation led advertising revenue to decline by 50%, 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% 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 US$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 US$25 billion to acquire an estimated 79% stake in the company last year.
The latest markdown erases about US$850 million from Musk’s US$187 billion fortune, according to the index.
Despite Twitter’s issues, Musk’s wealth is up more than US$48 billion this year, largely due to a 63% surge in Tesla’s share price.
– The Washington Post
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