Investment firm Fidelity has drastically reduced the valuation of Elon Musk’s social media platform, X (formerly Twitter), by 78.7%, indicating a current estimated value of just $9.4 billion. Musk had originally purchased the company for $44 billion in October 2022 amid significant public attention.
According to recent estimates by Fidelity, the asset manager now values X at less than a quarter of its purchase price. As of the end of August, its stake was reported to be worth around $4.18 million, down from about $5.5 million in July, as per TechCrunch, citing regulatory filings.
Neither X, Fidelity, nor Musk has commented on these adjustments made public through regulatory disclosures.
In related developments, Musk’s artificial intelligence company, xAI, raised $6 billion in May to boost research and development in future technologies, announcing a pre-money valuation of $18 billion. xAI recently launched an AI chatbot named ‘Grok’, with significant funding contributions from Fidelity Management and Research, among other key investors.
Earlier in January, Fidelity had already marked down its investment in Musk-run X Holdings, the parent company of X, by 71.5% from its initial value. Fidelity invested $300 million in X Corp in October 2022 when Musk took over the platform.
In 2023, Fidelity previously cut X’s valuation by 65% and has now further decreased it in a new disclosure. After acquiring Twitter with a $13 billion loan, Musk assured bankers they would not lose money despite the division of debt into $6.5 billion of term loans, $6 billion of senior and junior bonds, plus a $500 million revolver. Nevertheless, lenders were expected to receive less than 60 cents on the dollar for the bonds and loans.
