Twitter’s value down two-thirds since Musk takeover, says investor

theguardian.com:

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