Thursday, September 28, 2023

Twitter’s value plummets by two-thirds – Musk’s costly acquisition takes a hit: Report

Must Read

Share

Loading

A sign at Twitter headquarters is shown in San Francisco, Dec. 8, 2022. While shaky and skewered by critics, Twitter’s forum for Florida Gov. Ron DeSantis to announce his presidential run nevertheless underscored the platform’s unmistakable shift to the right under new owner Elon Musk.(AP)

Twitter’s worth has dropped to one-third of what Elon Musk and his co-investors spent to acquire the social media network last year, according to financial services giant Fidelity. According to Fidelity’s most recent monthly portfolio valuation report, Twitter is valued at only $15 billion, a minuscule fraction of the $44 billion acquisition price. This is Fidelity’s second decrease in business valuation since the acquisition, casting a bleak picture for the once-promising platform.

Fidelity’s Twitter stock, valued at approximately $6.55 million as of late April, has taken a significant fall under Musk’s X Holdings. Musk has admitted that he overpaid for Twitter, and he recently indicated that the site is worth less than half of what he spent for it. The exact technique utilized by Fidelity to arrive at their revised valuation remains unknown, as does whether they received any non-public information from the company.

The decline in Twitter’s fortunes began shortly after Musk took the helm. The burden of $13 billion in debt, coupled with Musk’s erratic decision-making and challenges with content moderation, resulted in a staggering 50% decline in advertising revenue, as revealed by Musk in March. Even an attempt to recoup revenue through the sale of Twitter Blue subscriptions has fallen flat, with less than 1% of monthly users signing up as of March.

Despite Twitter’s struggles, Musk’s personal wealth has experienced an overall increase of more than $48 billion this year, largely driven by a remarkable 63% surge in Tesla Inc.’s share price. Nevertheless, the latest markdown from Fidelity erases approximately $850 million from Musk’s $187 billion fortune, according to the Bloomberg Billionaires Index.

Twitter’s downward spiral has not been limited to financial woes. Since Musk’s acquisition, the company has undergone significant changes, including massive layoffs of over half its workforce and the loss of several prominent advertisers. Additionally, its attempt to generate revenue through a paid verification program has failed to gain significant traction.

Looking ahead, former NBCUniversal ad chief Linda Yaccarino has accepted the position of Twitter’s CEO, set to take over in June. Fidelity’s report, however, does not account for this recent development. Yaccarino faces the challenging task of turning around the struggling platform and regaining the trust of advertisers.

While Twitter’s decline has undoubtedly affected Musk’s personal fortune, his investment in Tesla has soared to new heights. As Tesla’s largest individual shareholder, Musk has seen the company’s market value reach a staggering $638 billion, nearly doubling in 2023 alone. This contrasting dynamic illustrates the divergent paths of these two ventures under Musk’s leadership.

As the dust settles, Twitter’s future remains unknown. Can Yaccarino’s leadership bring the faltering platform back to life, or will Musk’s investment continue to suffer? Only time will tell.Twitter's value plummets by two-thirds - Musk's costly acquisition takes a hit: Report

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest News

Prince Harry asked to ‘give notice’ to visit King Charles after being denied stay at Windsor Castle this month: Report

It has been alleged that Prince Harry must "give notice" to visit his father after he was denied a...

More Articles Like This