Fidelity writes down its valuation of X

Like Minnie Driver and Matt Damon in Good Will Hunting, Fidelity is writing down its number for X. The social media platform formerly known as Twitter is worth significantly less than two years ago when Elon Musk bought it, according to recent estimates from the investment giant (how do you like them apples?).

Background: Though X is no longer publicly traded, Fidelity still holds a stake in the company and publicly discloses how much it thinks these shares are worth.

• As of the end of August, the investment giant’s Blue Chip Growth Fund estimates its shares are worth $4.2 million. That’s down 24% from its July estimates, and 79% from October 2022 when Musk acquired Twitter.
• This implies an overall valuation of $9.4 billion for X, vs. the $44 billion Musk paid.

Other investors could value X differently… However, it’s clear the company is in the midst of a downward trend – something even Musk admits.

Advertising revenue, which comprises ~90% of the company’s overall revenue, fell 24% in the first half of 2024 compared to the same period last year (reaching $744 million), while user engagement is also down.

😬 Overall, X isn’t too popular with its backers. The seven banks who helped Musk finance the deal haven’t been able to offload the debt without incurring major losses, largely because of X’s weak financial performance, leaving the loans stuck on their balance sheets, or “hung” in industry jargon, the Wall Street Journal reports.