Shareholder values Elon Musk’s Twitter at $15 billion, a $29 billion mistake?

Musk had previously acknowledged that he overpaid for Twitter when he purchased the social media platform for $44 billion last year.
Sejal Sharma
Elon Musk
Elon Musk.

Wikimedia Commons 

Elon Musk overpaid for Twitter. 

He knows it, the world knows it. And now, as per a report by Fidelity, which has repeatedly slashed the value of its own Twitter stake since November, has now valued the company at roughly $15 billion. 

It’s a third of what Musk paid to acquire Twitter

Fidelity, a financial services giant, first reduced the value of its stake in the microblogging website in November, slashing it to 44% of the purchase price. This was succeeded by further markdowns in December and then in February.

Fidelity's stake in Twitter was valued at almost $6.55 million as of April 28, compared with $7.8 million on January 31 and $8.63 million at November-end, said a report by Reuters.

Fidelity came up with the evaluation based on a markdown of its own stake in the company, reported Gizmodo. However, Bloomberg, which reported the story first, said that it’s “unclear how Fidelity arrived at its new, lower valuation or whether it receives any non-public information from the company.”

Musk had previously acknowledged that he overpaid for Twitter when he purchased the social media platform for $44 billion last year. The company was $13 billion in debt after Musk’s acquisition. Interesting Engineering earlier reported on how Musk’s recent decisions, which some deemed questionable, led Twitter’s advertising revenue to take a massive dip.

Public opinion has also not worked in Musk or Twitter’s favor, with the website’s founder and former CEO Jack Dorsey saying that Musk is not the best leader to lead the company.

Musk, who runs other companies like Tesla and SpaceX, has been under pressure to give more time to these companies. Hence, earlier this month, he even announced that he has hired a new CEO for Twitter, with rumors about NBC Universal executive Linda Yaccarino soon assuming the role.

Musk has been dabbling in an array of strategies to boost Twitter revenues. First off, he let go of 80% of the social media platform’s employees in a manner that raised eyebrows.

He launched Twitter Blue, which is a subscription-based service that adds a blue ‘verified’ tick on a user’s profile and allows them to get their hands on services like undoing tweets and exclusive content at $8/month or $84/year.

He’s since then launched encrypted DMs for paid users in a bid to compete with other messaging platforms that have end-to-end encryption, like WhatsApp and Signal. He has also announced that Twitter users will be able to make audio and video calls on its platform without sharing their phone numbers, placing it in direct competition with Mark Zuckerberg’s Meta.

Other new features include media publishers charging users on a per-article basis and allowing users to buy stock and cryptocurrencies through its app.

Even after a slew of attempts to rejig Twitter’s structure and make it a money-making machine, by his own admission, the company’s been making just enough money to break even. Even Tesla’s stock price dropped significantly after Musk took over Twitter in October 2022.

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