When billionaire Elon Musk bought Twitter, later renamed X, in 2022, he didn’t do it alone. While he paid the bulk of the $44 billion with his own money, he also relied on bank loans and numerous investors, the full list of whom was recently revealed. Now it has become known that the deal resulted in “staggering losses” for investors.
Saudi Prince Alwaleed bin Talal, who invested about $2 billion in Twitter shares owned by him and a Saudi holding company, wrote at the time of the deal that he believed Musk would be a great leader for the platform. Two years later, Alwaleed says he’s still happy with the investment, but for others, the deal looks significantly less attractive.
Investor Losses and Value Decline
Fidelity, an outside investor in Twitter, values X’s stake in one of its funds at 70% less than it was worth at the time of the purchase. According to the source, Fidelity’s stake in X has fallen by about 72% compared to when Musk bought the social network. As a result, the company’s stake has decreased from about $316 million to $88 million.
According to the Washington Post, the eight largest investors who took part in the deal to buy Musk’s social network Twitter have lost about $5 billion in total to date. If you take into account the investments of Elon Musk and his partners, the amount of lost funds increases to $24 billion. Official representatives of the investors and Elon Musk refrain from commenting on this issue.
One of the major investors in this deal was Twitter founder Jack Dorsey, who lost about $720 million and expressed dissatisfaction about it. Last year, he also said that Musk should not have bought Twitter at all.
As the situation continues to evolve, we’ll keep you updated on any new developments regarding the financial implications of this high-profile acquisition. The long-term impact of these losses on the investors and the platform itself remains to be seen, and it will be interesting to observe how this affects future investment strategies in the tech industry.
The Twitter acquisition saga serves as a cautionary tale about the risks involved in high-stakes tech investments, even when backed by prominent figures like Elon Musk, notes NIXsolutions. It highlights the volatility of the social media market and the challenges of valuing such platforms in an ever-changing digital landscape.
As we continue to monitor the situation, it’s clear that the repercussions of this deal will be felt for some time to come, not only by the investors involved but also by the broader tech investment community. The outcome of this venture may influence how future large-scale acquisitions in the tech sector are approached and financed.