X in Crisis? Fidelity Slashes Valuation of Musk's Venture!


X in Crisis? Fidelity Slashes Valuation of Musk's Venture!
© Getty Images/Alex Wong

The platform formerly known as Twitter, now X, investment heavyweight Fidelity has substantially downgraded the value of its shares in the company. A recent securities filing reveals that Fidelity believes its shares in X are now worth 71.5% less than their value at the time of Elon Musk's acquisition in October 2022.

This revelation, disclosed in a filing by Fidelity’s Blue Chip Growth Fund dated December 30 and reporting information up to November 30, suggests a marked decrease in confidence. Fidelity now estimates the shares it holds in X to be valued at just under $5.6 million.

This figure contrasts starkly with the $19.66 million valuation around the time Musk completed his purchase of Twitter, and it represents a 14.5% decrease from the $6.55 million valuation in April last year.

A Reflection of X's Turbulent Year

The reassessment of X's value by Fidelity is not an isolated incident but part of a trend reflecting the platform's challenges over the past year.

Many of these difficulties have been linked to decisions and actions taken by owner Elon Musk. The past months have seen Fidelity making slight adjustments to its valuation of X, particularly during a period last summer when Linda Yaccarino was named CEO of X.

Despite these brief moments of increased valuation, the overarching trend has been a downward revision of X's worth in Fidelity’s portfolio. This valuation is particularly significant given that X is a privately held company.

As a result, Fidelity's assessments are seen as key indicators of the company's financial health and are closely monitored. They also reflect the sentiments of Musk’s investors towards the company under his leadership.

Fidelity's latest move, as first reported by Axios, underscores the ongoing challenges facing X and raises questions about the future direction and stability of the platform under Musk's ownership. The decrease in valuation by a major investor like Fidelity could have broader implications for X's market perception and investor confidence.