Business

Fidelity Slashes Valuation Of Elon Musk’s X By Nearly 79%

Fidelity, a leading global investment firm, has significantly decreased the valuation of its stake in Elon Musk’s social media platform X (formerly Twitter) by an astonishing 78.7%.

This adjustment indicates that X is now valued at approximately $9.4 billion, a stark contrast to Musk’s $44 billion purchase price in October 2022.

According to recent regulatory filings cited by TechCrunch, Fidelity’s new estimate shows that X’s value has plummeted to less than a quarter of its original acquisition cost.

The firm now estimates its stake in X to be worth around $4.18 million, a drop from $5.5 million just a month earlier.

As of now, neither Fidelity, Musk, nor representatives from X have provided comments regarding this latest valuation adjustment.

Earlier this year, Fidelity marked down its investment in Musk’s X Holdings by 71.5% from its initial valuation.

Fidelity initially acquired a stake in X Corp for $300 million during Musk’s takeover of the platform.

Since then, the firm has progressively slashed its valuation of X, cutting it by 65% earlier in 2023, followed by this latest reduction.

In a related development, Musk’s artificial intelligence venture, xAI, recently raised $6 billion to further its research and development initiatives.

Musk stated that the pre-money valuation of xAI stands at $18 billion, with Fidelity Management and Research among the key investors.

Despite the substantial debts Musk incurred to finance his Twitter acquisition, reportedly totaling $13 billion, comprising various loans and bonds, he assured bankers that they would not incur losses from the deal.

However, given the current valuation and market conditions, lenders may not recover even 60 cents on the dollar for the bonds and loans tied to the acquisition.

Also Read: BharatPe & Ashneer Grover Reach Settlement Amid Financial Misappropriation Allegations

Mankrit Kaur

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