Fidelity, a major asset management firm, has reduced the value of its investment in X (previously Twitter), now valuing the platform at $9.4 billion. This is a huge drop from Elon Musk’s original purchase price of $44 billion in 2022, with Fidelity’s stake down by 78.7% as of August.
How Much Has the Investment Dropped?
When Musk bought X for $44billion, Fidelity invested $19.66 million. That investment is now worth just $4.18 million after multiple cuts.
A month ago, the stake was valued at $5.5 million, showing a further drop in recent months.
This isn’t the first time Fidelity has lowered its stake. In 2023, the firm reduced its investment by 65%, followed by another 71.5% markdown earlier this year. Despite these steep reductions, Musk and representatives from both X and Fidelity have not made any public comments about the valuation changes.
What Does a $9.4 Billion Valuation Mean?
With X now valued at $9.4 billion, the platform is worth less than a quarter of what Musk paid. Musk took out a $13 billion loan to buy X, but lenders are reportedly struggling to recover even 60% of that loan’s value.
The debt, spread across different types of loans and bonds, makes it difficult for creditors to recover their investments.
Challenges Under Musk
Fidelity’s decision to cut its stake further comes as X faces growing challenges under Musk’s leadership. While Musk has raised $6 billion for his other companies, like xAI, the sharp drop in X’s value raises concerns about the platform’s future.
As X continues to face financial difficulties, many are left wondering what the future holds for the social media platform under Musk’s control
