Other Technology | June 6, 2023
When Elon Musk took control of Twitter last October, paying $44 billion for it, many argued that the billionaire had paid an excessive amount for the social media platform. And a new document that has just come to light seems to support their claim.
Fidelity Blue Chip Growth Fund, one of the many investment funds that hold a stake in Twitter, has publicly disclosed its current valuation estimate for Twitter while also announcing its intention to further reduce its ownership in the company. Based on the decline in the value of its own shares, Fidelity has estimated that Twitter is now worth approximately 33% of what Musk paid for it, an amount that would be around $15 billion.
It is true that, as Bloomberg warned, “it is unclear how Fidelity arrived at this new downward valuation or if it has access to private company information,” but it does not seem far-fetched to think that the current value of Twitter is approaching those figures.
Firstly, we must remember that Tesla’s CEO tried to lower his initial offer to purchase Twitter and practically cancel the deal from the beginning of the negotiations, citing the presence of bots on the platform and various other bizarre reasons. In response, Twitter sued Musk in the United States’ main commercial disputes court, and the billionaire was ultimately forced to adhere to the initial agreement terms.
Moreover, Musk himself admitted last March that the social media platform was worth less than half of what he had paid for it. Considering the service outages, the decline in advertisers, and all the controversies surrounding the platform, it is not difficult to imagine how its market capitalization has continued to decrease. The lingering question now is: How much further will it continue to decline?
