Fidelity, which helped Elon Musk acquire the platform formerly known as Twitter in late 2022, announced that its stake in the company has fallen 72% in that time, according to an analysis by Bloomberg.
In November, Fidelity said its current stake in X was worth $5.6 million in November, a 72% drop from the value of its stake at the time Musk took control. Unless the company has changed its stake in X, the announcement would seem to indicate that the value of X as a whole had also fallen by 72%.
Musk bought the company in October of 2022 for $44 billion. If the company as a whole has also fallen by 72% since his purchase, that means it’s now worth roughly $12.3 billion, or less than the $13 billion in debt the billionaire took on to purchase the platform.
That poses a problem for banks that hold Musk’s debt. They’ll either need to sell it at a steep discount or continue to hold it and potentially see its value sink further.
Per an FT analysis earlier this week, X debt would likely sell at 60 cents on the dollar. In all, that would mean a $5 billion loss.
While the Twitter acquisition has been a financial mess thus far, Musk’s vast net worth is likely carry him through it no matter the outcome. As he was finalizing the purchase, Musk sold large blocks of Tesla shares. (He owns about 13% of the automaker’s stock.) The move rattled the market at the time but the stock has returned to healthy levels in recent months and the billionaire is back atop the ranking of the world’s wealthiest people.