Twitter Has Lost Two-Thirds of Its Value Since Elon Musk Bought It: Report
Twitter’s value is going viral for all the wrong reasons.
The social media platform is worth only around one-third of what Elon Musk and his 19 co-investors paid to acquire it late last year, according to a new disclosure from one of those investors.
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A monthly report of portfolio evaluations from Fidelity reflected the downgrade. Fidelity owned a $20 million stake in Twitter before it was sold to the Tesla mogul. However, the financial services provider recently reported that as of late April, its stake was worth $6.55 million.
Extrapolating from that figure, the valuation for the company is now around $15 billion. It isn’t clear what factors Fidelity considered when coming up with its valuation, or if it receives non-public information from Twitter.
In response to an inquiry from Robb Report about the valuation, the email account for Twitter’s press team auto-replied with the now infamous poop emoji.
Musk himself said in March that the platform was worth $20 billion, a figure that he included in an email to the company’s employees in regards to a stock compensation program, The New York Times reported. Back in April, Musk said of his acquisition of Twitter that “it remains to be seen whether this was financially smart—it currently is not.”
Musk’s efforts to stanch the financial bleeding to the platform have not appeared to be successful. He unveiled the $8 per month subscription service Twitter Blue that allows users to make longer tweets and videos. It also gives subscribers a blue checkmark badge. However, Travis Brown—a developer who subscribes to access the paywalled Twitter API—has reported that less than 1 percent of Twitter’s entire monthly active user base use the service.
Twitter’s relationship with advertisers has also been fraught, with many companies deciding not to spend money on the platform. It has been speculated that Twitter hired former NBCUniversal advertising executive Linda Yaccarino to bring its business partners back. Musk talked about the issue while attending a Morgan Stanley conference in March. “What I’d say to advertisers and brands is: Use Twitter for yourself and believe what you see on Twitter, not what you read in the newspapers,” Musk said, according to Vox. “Because what you see on Twitter is the real thing and what you read in newspapers is not.”
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