Investment firm Fidelity has written down the value of its initial stake in Twitter after financing Elon Musk’s acquisition of the social media platform.
According to a November 2022 Fidelity Blue Chip Growth Fund statement, the company has reduced the book value of its investment in Twitter by more than 50%. Axios was the first to report this information.
Depreciation is a reduction in the value of an asset on a company’s balance sheet.. This usually happens when the market value of the asset falls below its book value, which is the value at which the asset is recorded on the balance sheet.
Fidelity’s initial stake in Twitter was valued at $19.66 million in October 2022 and is now down to just $8.63 million. According to Market Insider, Fidelity put up $316 million to help Musk’s bid to take over Twitter in October 2022.
Fidelity maintains its investments in Twitter through its investment funds in X Holdings I Inc, a holding company that Musk used as part of his takeover bid for Twitter.
Musk’s acquisition of Twitter has been a controversial topic, clouded by layoffs and a host of operational changes at the social media giant. Several reports speculate that other investment firms will follow suit and reduce the value of their Twitter holdings.
Cryptocurrency exchange Binance was one of the companies that provided funds for Musk’s acquisition of Twitter. The company committed $500 million to co-invest in Twitter along with Fidelity, Sequoia Capital Fund and 18 other companies.
Cointelegraph has contacted Fidelity for details of the redemption of its Twitter holdings.
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