Social media giant Twitter, acquired by billionaire Elon Musk for a staggering $44 billion, has seen its market value plummet to just one-third of its purchase price, a Reuters report said. Financial services company Fidelity, holding an equity stake in Twitter, recently marked down the value in their monthly disclosure on Sunday, shedding light on the challenging financial situation that has unfolded since Musk took control of the platform.
The acquisition, completed last year, raised eyebrows and sparked debates about the future of Twitter under Musk’s leadership. Now, it seems those concerns were not unfounded. Musk himself acknowledged that he had overpaid for the platform, and recent reports indicate that Twitter’s Worth is now less than half of what he initially paid.
Twitter’s financial struggles have intensified since Musk’s takeover, with the company burdened by a substantial $13 billion debt. Musk’s unconventional decision-making and content moderation challenges have further exacerbated the situation, leading to a staggering 50 percent decline in advertising revenue, as confirmed by Musk in March.
To mitigate the revenue loss, Twitter introduced a subscription-based service called Twitter Blue, aiming to recoup some of the advertising revenue shortfalls. However, this attempt has fallen short of expectations, with less than 1 percent of Twitter’s monthly users opting for the premium service by the end of March.
The recent markdown of Twitter’s value by Fidelity raises concerns about the platform’s prospects and its ability to regain stability under Musk’s guidance. While the exact methodology behind Fidelity’s valuation figures remains unclear, this development reflects the challenging nature of evaluating private companies like Twitter, now known as X Holdings Corp., without access to verified financial information.
The future of Twitter hangs in the balance, with stakeholders hoping for a turnaround that will restore investor confidence and unlock the platform’s full potential. Elon Musk’s ambitious acquisition may have hit a roadblock, but as history has shown, the tech industry is known for its unexpected twists and turns. All eyes will be on Musk as he navigates this critical juncture, aiming to transform Twitter’s fortunes and prove its skeptics wrong.
(With inputs from Reuters)
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