Investory Fidelity has slashed its valuation for X, the company that used to be Twitter, by 79% from when Elon Musk bought the platform. The asset manager now values its stake in X at about $4.19 million as of the end of August, according to new disclosures from Fidelity’s Blue Chip Growth Fund. This cut is part of a much wider decrease in the overall valuation of the company, which is now under a quarter of its initial $44 billion purchase price.
Fidelity had initially invested $19.66 million in X. The firm has repeatedly slashed the value of its holdings since Musk’s acquisition. In July, Fidelity valued its stake at around $5.5 mln, a 72% haircut at the time. This continued decline further implies the continued low-probability challenges befuddling X as it tries to reinvent itself, under the leadership of Musk.
The 78.7% markdown brings the total valuation of X to roughly $9.4 billion, significantly lower than its initial worth. Musk financed the $44 billion acquisition through a combination of equity and debt, with many speculating about the long-term viability of his strategy for transforming the social media platform.
X is not the first to experience financial difficulties. The corporation has experienced massive layoffs, modifications to its user verification procedure, and content moderation-related concerns since Musk took charge. The recent action by Fidelity highlights how challenging it will be for X to regain its value in the face of these tactical and operational obstacles. Investors and market experts alike continue to be interested in the company’s valuation as it develops.
Fidelity’s move to lower X’s projected value reflects deeper worries about the platform’s survival under Musk’s direction, especially as it negotiates the increasingly unstable and competitive digital market.