Fidelity has reduced the valuation of its stake in Elon Musk’s social media platform X (formerly Twitter) by 19% in its November portfolio update, reflecting a 72% markdown since Musk’s acquisition of the platform just over a year ago for $44 billion, Bloomberg reports.
The reduction follows a series of previous markdowns by Fidelity as the platform struggles with advertiser retention and holds $13 billion in debt. The platform, under Musk’s leadership, has experienced significant changes and challenges, including shifts in moderation policies, layoffs, and a decline in projected ad sales for 2023.
The latest markdown occurred amid controversies, including Musk’s agreement with an anti-Semitic post, drawing criticism and prompting major advertisers like Disney and Apple to distance themselves from the platform. The revenue from ad sales for 2023 is estimated to be $2.5 billion, significantly lower than the previous rate of around $1 billion per quarter.
