Twitter’s valuation is now a third of what it used to be , Elon Musk acquired Twitter for US$44 billion last year. All parties agree that the value is much greater than the company’s current valuation.
According to investment house Fidelity, Twitter is now worth about 33% of what the billionaire paid for it. Roughly speaking, Twitter is worth about US$ 15 billion.
The figure comes from the investment firm’s own valuation of its own stake in Twitter. Fidelity’s valuation of Twitter follows a pattern since Musk took over in October last year.
Fidelity has consistently downgraded its own stake in the company, dropping the value of its shares by 56% just a month after the acquisition closed. In late February, Fidelity downgraded its stake by more than 63% before knocking it down by a full two-thirds this month.
“Despite Musk’s recent claims about Twitter soon breaking even or even becoming profitable, the company’s prospects have not been very good. Twitter lost about half of its biggest advertisers when Musk took over. Many still haven’t returned earlier this year and those who continue to advertise on the platform are spending far less,” wrote a report by Mashable, Wednesday (5/31/2023).
Musk turned to subscription-based revenue models like Twitter Blue and Subscriptions to make up for the losses, but even those models proved unsuccessful. Twitter Blue is an US$8 per month subscription service that gives premium features, such as longer tweets and videos, and a blue checkmark badge to paying users.
Based on recent data from researcher Travis Brown, less than 1% of Twitter’s entire monthly active user base has subscribed to Twitter Blue.
Read more
Twitter’s other subscription product, known as Subscriptions, allows users to pay a monthly fee directly to specific Twitter users to access exclusive paid tweets and other content. Musk himself leaked that he had about 25,000 subscribers last month or just 0.018% of the approximately 136.4 million followers he had at the time.
Musk has since announced Linda Yaccarino, a former advertising executive with NBCUniversal, will join to replace Musk as CEO. This move was ostensibly made to help turn things around regarding Twitter’s issues with advertisers. However, Musk has made it clear that he will remain on Twitter.