Fidelity has written down the value of its initial investment in Twitter following its support of Elon Musk’s takeover of the platform
The write-down, which reduces the value of an asset on a company’s balance sheet, resulted in a decrease of more than 50% in the carrying value of Fidelity’s investment
Fidelity’s initial stake in Twitter, valued at $19.66 million in October 2022, was reduced to $8.63 million
Fidelity provided $316 million towards Musk’s bid to acquire Twitter in October 2022
Fidelity, an investment firm, has recorded a significant reduction in the value of its initial investment in Twitter after supporting Elon Musk’s acquisition of the social media platform. The Fidelity Blue Chip Growth Fund reported in November 2022 that the carrying value of the Twitter investment had been decreased by more than 50%.
This is known as a write-down, which occurs when an asset’s market value falls below its recorded book value on a company’s balance sheet. Fidelity’s initial stake in Twitter, valued at $19.66 million in October 2022, has now been reduced to $8.63 million. It is reported that Fidelity provided $316 million to assist Elon Musk’s bid to acquire Twitter in October 2022.
Fidelity has held its Twitter investments through X Holdings I Inc., a holding company utilized by Musk in his bid to acquire Twitter. The controversial takeover, which has been marked by layoffs and significant changes at the social media company, has prompted speculation that other investment firms may also reduce the value of their Twitter holdings.
Binance, a cryptocurrency exchange, announced in May that it had pledged $500 million towards Musk’s acquisition of Twitter. The exchange, which has advocated for widespread adoption of cryptocurrencies, believes that Twitter can contribute to making crypto more accessible. According to Bloomberg, Elon Musk has completed the acquisition of Twitter and is reportedly planning to lift lifetime bans on the platform and implement new changes to make it a global social hub.