, one of the world’s largest asset management companies (AMC), has marked down the value of its stake in , slashing the worth of the social media firm to just one-third of what Elon Musk paid for, according to a Bloomberg report.
Musk, who bought Twitter in October last year for $44 billion in a long-drawn-out deal, has acknowledged he overpaid for the micro-blogging platform. He recently stated that Twitter’s value is now less than half of what he originally paid for it.
It is worth noting that an AMC’s evaluations of fair values are typically influenced by its internal assessment of the broader macro and microenvironment. The methodology behind Fidelity’s revised, lower valuation remains unclear.
In November, Fidelity initially decreased the worth of its Twitter investment to 44% of the purchase price. This was then followed by additional cuts in December and February.
Following his acquisition of the social media firm, Musk is actively working to decrease the firm’s expenses and exploring alternative avenues to generate revenue, such as its verified subscription services. In the past, Twitter heavily relied on advertising revenue, but it is currently facing a significant decline in this area.
In March, Musk stated that the challenges related to content moderation resulted in a 50% decline in advertising revenue. Moreover, less than 1% of Twitter’s monthly users had subscribed to the service by the end of March, as per the report.
Despite the difficulties faced by Twitter, Musk’s wealth has increased by over $48 billion this year, primarily driven by a remarkable 63% rise in the share price of Tesla Inc, the report added.
