Fidelity has cut the valuation of its stake in Elon Musk’s X again, reflecting a 72% markdown since the billionaire bought the former Twitter Inc. A little more than a year ago.
The investment firm, which helped Musk complete the $44 billion purchase, cut the value of its holding in X by 19% in its November portfolio update for the Blue Chip Growth Fund, compared with a September filing, according to calculations by Bloomberg. It’s the latest in a series of markdowns by Fidelity since Musk concluded the acquisition of the social media platform in October 2022, as closely held X has struggled to hold on to advertisers and is weighed down by $13 billion in debt.
Fidelity didn’t disclose the size of its current stake in X, which it said was valued at $5.6 billion. It’s unclear how Fidelity arrived at its new, lower valuation or whether it receives any non-public information from the company.
As of Oct. 30 the fund hadn’t sold any of its stake, but the monthly report with the updated valuation doesn’t disclose whether the size of the holding changed. Assuming the fund hasn’t reduced its holding in X, the latest report implies the value of the entire company has also fallen by 72%. Fidelity declined to comment.
Axios previously reported on the latest Fidelity filing.
Under Musk, X has faced a cascade of abrupt changes, from drastic layoffs and the shuttering of international offices to an upending of the platform’s moderation policies and verification system. The upheaval has turned off advertisers and 2023’s revenue from ad sales is estimated to come in at $2.5 billion, far below the prior rate of roughly $1 billion per quarter, Bloomberg News reported last month.
Fidelity’s latest markdown came amid a particularly tumultuous time for X. In November, Musk unleashed a wave of criticism after he agreed with a post that said Jewish people held a “dialectical hatred” of White people, drawing a rebuke from the White House as well as several Tesla Inc. Investors. At the same time major corporate spenders, including Walt Disney Co. And Apple Inc., distanced themselves from the platform. Their actions prompted Musk to lash out during an on-stage interview with the New York Times, in which he told advertisers that abandoned X that they could go “f——” themselves.