A recent report has revealed that Twitter’s current valuation has shrunk, as the micro-blogging platform is now one-third of what Elon Musk acquired it for last year October.
According to financial services corporation Fidelity Investments, in its annual monthly report of portfolio valuations posted on the 28th of May, the financial services giant stated that the market value of its equity stake in Twitter, identified by its new name, X Holdings Corp. fell to $6.5 million at the end of April, from $19.66 million when Musk concluded the deal a 66% drop. This implied that Twitter’s current valuation is about $15 billion.
This means that in just six months since Musk paid the sum of $44 billion including $33.5 billion in equity to purchase Twitter, the company’s value has plunged by nearly two-thirds. Meanwhile, some other aspects of Twitter’s current financial health are uncertain, because the company hasn’t made enough disclosures.
Recall that Elon Musk admitted that he had a bit of buyer’s remorse over his $44 billion acquisition deal for Twitter which he stated that he obviously overpaid. This saw Musk warn workers that Twitter remained in a precarious financial position and, at one point, had been four months away from running out of money.
Investors King understands that part of the fall in Twitter’s value can be attributed to a series of decisions carried out by Musk, such as mass layoffs affecting critical teams and challenges with content moderation that have turned advertisers away from the platform.
Musk was able to win back some of them by providing steep discounts. He has also implemented subscription-based verification to boost sales.
Musk who expressed optimism, says he sees a ‘clear but difficult path’ to $250 billion valuation, which would mean current grants could 10x. He however noted that Twitter is on the path of an inverse startup. The mercurial mega-billionaire believes the social network will be worth far more in the future.
