- Musk identified combating spam and scam bots as a high priority.
- Elon’s takeover has been a sore spot, with mass layoffs and a slew of other changes.
Following the backing of Elon Musk’s purchase of Twitter, investment company Fidelity has written down the value of its original share in the social media site. Fidelity Blue Chip Growth Fund has reduced the carrying value of its Twitter investment by more than 50 percent, as reported in a November 2022 filing.
Taking an asset to zero on the balance sheet is called a write-down. As a rule, this happens when the asset’s current market value is less than its book value (the amount at which the item is represented on the balance sheet).
Tough Times For Musk
Prior to the write-down, Fidelity’s original ownership in Twitter was valued at $19.66 million in October 2022. In October of 2022, Musk reportedly submitted a takeover proposal for Twitter, and Fidelity backed his effort with $316 million, as reported by Market Insider.
Moreover, mutual funds managed by Fidelity are invested in X Holdings I Inc., the holding company Musk utilized in his attempt to acquire Twitter.
Musk’s takeover has been a sore spot, with mass layoffs and a slew of other changes to the social media giant’s operations. Many media outlets are reporting that some investors are considering writing down the value of their Twitter holdings. After becoming Twitter CEO in October, Musk identified combating spam and scam bots as a high priority. To add woes to concerns, Tesla stock has been on a downward trend for some time now.
Several businesses, including the cryptocurrency exchange Binance, contributed to Musk’s purchase of Twitter. It joined Fidelity, Sequoia Capital Fund, and 18 others in committing $500 million to co-invest in Twitter.
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- Source: https://thenewscrypto.com/fidelity-reduces-value-of-investment-in-twitter-by-more-than-half/