Twitter/X: Fidelity provides its eyewatering estimate of Musk's value destruction
Published: 04:13 02 Jan 2024 EST
Anyone who has watched the slow-motion car crash that has been Elon Musk's ownership of Twitter (now X) is probably aware that it is not worth what the multi-billionaire paid for the social media giant just over a year ago.
Now, Fidelity Investments, part of the consortium that financed Musk's takeover of Twitter, has given its estimate of the scale of the value destruction involved - and folks, it's eyewatering.
The money manager has assessed the platform's value to be 71% less than its purchase price. Musk had bought the social media company for $44 billion, with the deal involving $33.5 billion in equity and additional debt financing.
Musk, before acquiring Twitter, had been openly critical of the platform, claiming it undermined democracy and was biased due to its leadership and employee base.
Post-acquisition, he implemented massive layoffs and displayed a dismissive attitude towards paying customers and their concerns.
His controversial remarks towards advertisers included telling them to "go f--- yourself", coupled with his (seeming/apparent) endorsement of an antisemitic conspiracy theory (a lapse he since apologised for).
However, this has led to an advertiser exodus and a potentially significant financial loss for the company.
Only time will tell whether Musk will rescue the situation. His tone has been far from conciliatory. "What this advertising boycott is going to do is, it is going to kill the company," Musk said. "And the whole world will know that those advertisers killed the company."
