Twitter’s value has plummeted by almost two-thirds since Elon Musk acquired the company in October 2022, one of the social media company’s only remaining external investors has admitted.
Fidelity, an asset manager that held a stake in Twitter worth about $20m after Musk acquired the business for $44bn, said in a corporate filing that its stake was now worth just under $6.6m. That would value the overall company, now officially called X Holdings Corp after Musk’s early venture X.com, at just $14.75bn.
The fund disclosed its holdings in its quarterly reporting on the performance of its blue chip growth fund, which invests in a range of companies in the US and around the world, focusing on household names with stable valuations. It also owns a $386m stake in Musk’s privately held rocket company, SpaceX, and another $849m in Tesla, which is publicly traded.
Twitter’s valuation is of particular interest to the company’s staff, many of whom were employed while it was publicly traded with compensation that included stock options. Musk offered to value those options at about $20bn in March, according to a Wall Street Journal report, an acceptance that the value of the company had fallen by at least half since he took over.
That valuation came with an incentive for Musk to lowball the estimate, however, because the higher it was, the more expensive employee remuneration would be. Fidelity, by contrast, has no such motivation for slashing the valuation further still.
Since taking over Twitter in 2022, Musk has instituted a wave of changes at a scale rare for a company with the size and impact of the social network.
Some have cut the company’s costs, including more than 10 waves of layoffs cutting its headcount by more than 70% and a move to default on rent payments at offices around the world. In London, the move prompted a lawsuit from the company’s landlord, the crown estate.
Any savings, however, appear dwarfed by the hit to revenues Musk’s chaotic leadership has produced. Cuts to teams responsible for content moderation and the closure of the site’s “verification” programme have prompted major advertisers to pull spending. Its revenue dropped by almost half in the months after Musk took over.
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Musk announced in May that he would be stepping down as chief executive, and that Linda Yaccarino – an NBC advertising executive known as the “Velvet Hammer” for her silky but tough negotiating style – would be taking over. Musk will stay on as chair and will retain responsibility for the service’s technology and app.