At the end of 2022, Elon Musk was forced to buy Twitter for $44 billion, since all his attempts to bring down the price since April of the same year had failed, and if he refused the terms of the deal on his initiative, the billionaire faced a serious fine. As some investors who also invested in X (formerly Twitter) note, the value of the company’s assets has since dropped by more than four times.
Image source: Unsplash, BoliviaInteligente
At least, this is the conclusion reached by representatives of Fidelity, who value their share in X’s capital at $4.19 million, which is less than the $5.5 million that it was worth at the end of July. In general, Fidelity initially invested about $19.66 million in X, but by the end of August this year it reduced the number of shares it owned by 78.7%. All this, according to TechCrunch estimates, allows us to value the entire social network X at $9.4 billion. When compared with the expected purchase price in October 2022, the company’s capitalization has decreased by more than 4.6 times in a couple of years.
Since X remains a private company owned by Elon Musk, it is difficult to assess its capitalization, and this must be done using such indirect data. The deal itself to buy Twitter by Elon Musk has caused a controversial reaction from the investment community; he will have to give new testimony in the relevant case this week. The American regulator SEC has reason to believe that Musk disclosed information about the concentration in his hands of more than 5% of Twitter shares in the spring of 2022 too late. Other investors accused him of concealing information about the preparations for the deal, allowing him to unjustly enrich himself by buying Twitter shares at below-reasonable prices.