Financial services provider Fidelity has erased roughly one-third of its equity value in Twitter after reassessing the company’s future growth prospects and overall worth.
The Fidelity Blue Chip Growth Fund, which is managed by Fidelity, reportedly lowered the market value of its equity stake in Twitter for a third time — from the roughly $20 million valuation the financial firm gave in October when Elon Musk first purchased the social media company — to just $6.55 million today, according to AP News.
The methodology for how Fidelity arrived at its new valuation for Twitter is unclear, but as a financial services provider, the Security Exchange Commission (SEC) requires the firm to disclose its holdings. Twitter Inc., which was renamed X Holdings Corp. in April, is currently a private company owned by Musk and is not required to disclose information about its finances.
When Musk purchased Twitter in October for $44 billion, he did so through a multi-party financing deal that included roughly $13 billion in equity financing from large investors like Bank of America, Barclays, and Morgan Stanley, among others.
Following the Twitter buyout, Musk trimmed roughly 80% of the company’s workforce, revamped a number of in-app tools, purged the platform of bots, and updated the social media platform to support a broad range of new features — all while operating with only 20% of the original staff at Twitter.
Despite Fidelity reportedly reducing the market value of its equity stake — and thus lowering Twitter’s overall worth — Musk was able to reclaim his position as the richest person in the world on Thursday, per Bloomberg’s Billionaire Index. Musk’s net worth as of May 31, 2023, was $192 billion, marking an increase of $55.3 billion year to date.
In April, Musk formally named Linda Yaccarino, NBCUniversal’s former head of advertising, as the social media platform’s newest CEO.
“I am excited to welcome Linda Yaccarino as the new CEO of Twitter!” Musk said in a tweet. “Yaccarino will focus primarily on business operations, while I focus on product design & new technology,” he said.
The Dallas Express reached out to Fidelity to confirm Twitter’s equity reassessment but had not heard back at the time of publishing.