Maybe Elon Musk has disbursed 44,000 million dollars to buy Twitter, but today it is not even close to being worth that sum. So it follows from a document published by Fidelity Blue Chip Growth Fundwhich for the third time lowered the value of its shareholding in the social network.
According to the asset management firm, one of many that helped the magnate finance the acquisition, His shares in Twitter today are worth just under $6.6 million.. This represents a sharp drop compared to the $19.7 million valuation his stake had in October 2022, shortly after Elon Musk took over the platform.
As reported The Wall Street JournalThis is the third time that the Fidelity Blue Chip Growth Fund has downgraded what it has invested in the social network. And with the readjustment, it is estimated that the valuation of Twitter today it would be around 15,000 million dollars. That is, practically a third of what Elon Musk paid just 7 months ago.
It is evident that the massive layoffs, the departure of the main advertisers and the erratic behavior of the businessman have been crucial for such a resounding fall in the company’s valuation. In fact, Bloomberg mentions that last November, Fidelity already considered that Twitter was worth 44% of what had been paid a month before, when the transaction was executed.
Twitter is worth much less than what Elon Musk paid
The calculations that today place the valuation of Twitter at around a third of what Elon Musk paid do not sound far-fetched. Let’s not forget that it was the tycoon himself who, a few months ago, admitted that he believed that the company was worth less than half of what he had paid. It happened at the end of March, when an internal communication was leaked explaining the new stock compensation system for employees.
It was based on an estimated valuation of $20 billion. However, despite the marked drop, the CEO of Tesla and SpaceX remained optimistic to reverse it in a big way. In fact, he told the workers that he believed that, following his guidelines, Twitter could become a company of more than 250,000 million dollars. But for now that is not happening, clearly.
That today Twitter is worth barely a third of what Elon Musk paid, is positioned as a great challenge for Linda Yaccarino. The new CEO of the social network, who would take office at the beginning of July, will have the difficult mission of rebuilding the marketing and advertising sector, which has suffered a shocking exodus of advertisers.
While the executive arrives with an excellent reputation in the industry, having generated $100 billion in ad sales during her tenure at NBC Universal, the landscape on Twitter is far from the best. The company needs to generate large amounts of money, not only to meet the goal of being profitable, but also to pay off the loans that Elon Musk took to buy it, as well as the brutal interest on him.