Mutual fund giant Fidelity has significantly marked down value of its X’s shares, reducing it by 71.5 per cent since Elon Musk bought Twitter -- and subsequently renamed it X -- in 2022, Axios has reported.
According to Fortune, the investment firm that helped Elon Musk buy X for $44 billion had already in November last year lowered the worth of its shares in X by 19 per cent. The marking down happened in the Blue Chip Growth Fund of the firm, which has been decreasing the value of its shares since Musk bought X in October 2022.
X, the social media platform, is having a hard time keeping advertisers and has a debt of $13 billion.
The mutual fund contributed over $300 million to Elon Musk's $44 billion takeover and experienced around 65 per cent decrease in value in the first eleven months. In September 2023, Fidelity reduced the value of its shares in X by another 8 per cent.
Fidelity had previously increased the value of its shares in consecutive months in beginning of 2023.
All the same, Fidelity's valuation methods for unlisted securities, such as Twitter/X, have not been explained, and other shareholders might have had different valuations.
According to The Guardian, following Musk's takeover, X experienced a 15 per cent decrease in monthly users amid allegations of increased hate speech on the platform. Musk's management has involved staff reductions and moderation cuts as well as a severe blowback from a section of leftist media, academics, and artists.
The European Union recently issued a warning to Musk due to X having the highest ratio of disinformation posts among large social media platforms.
Fidelity's updated valuation, reported by Axios, covers events until November 2023, including major companies pulling advertising after Musk endorsed an antisemitic conspiracy theory.
Musk's response to the boycott was controversial, as was his decision to reinstate accounts of banned figures like Donald Trump and Alex Jones.
In addition, X is facing new rules about how they control content, both in Europe and the US.
Musk's company went to court in September, trying to stop California's content-control law. But things didn't go well last week when US District Judge William Shubb said no to X's request to stop the law. The California rule says companies must share reports twice a year about their rules and how they handle content.
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