Elon Musk bought Twitter with a combination of his own money, bank loans and capital raised from friends and associates. Here’s how far his investors are underwater.
 |
| Elon Musk in Wilmington, Del., in July 2021. His takeover of Twitter, now called X, has plunged the company into turmoil. (Matt Rourke/AP) |
When Elon Musk bought Twitter and renamed it X, he didn’t do it alone. Though the billionaire tapped his vast wealth to cover the lion’s share of the $44 billion purchase price in 2022, he also relied on bank loans and a long list of investors, the full extent of which was only recently revealed.
At the time, analysts marveled at Musk’s ability to attract dozens of enthusiastic partners. Saudi Prince Alwaleed bin Talal, who rolled nearly $2 billion in Twitter stock held by himself and a Saudi holding company into the private deal, tweeted at Musk: “I believe you will be an excellent leader for @Twitter to propel & maximise its great potential.”
Two years later, Alwaleed says he is still happy with his investment. But to others, the deal looks significantly less appealing. Under Musk, X’s valuation has cratered — as Musk has acknowledged — leaving it worth as little as half what he paid.
Since late last year, Fidelity has consistently valued the X stake in one of its funds 70 percent below the purchase price, a drop in valuation first reported by Axios. Figures released Friday show that Fidelity now values that stake about 72 percent lower than when Musk took over X, taking its overall portion of the company from a valuation of around $316 million to $88 million.
Based on a Washington Post analysis using Fidelity’s estimates, the eight largest initial investments that were reported to the U.S. Securities and Exchange Commission or otherwise publicly disclosed are worth about $5 billion less than when Musk bought X. His and his partners’ overall stake has shed $24 billion in value — a vaporization of wealth that has little parallel outside the realm of economic or industry-specific crashes, or devastating corporate scandals.
All but the second-largest investor declined or did not respond to a request for comment for this article. Fidelity declined to comment. Musk and X did not respond to requests for comment.
Among those shouldering the burden: Saudi and Qatari business leaders and royalty; Silicon Valley venture capital and tech investors; and Twitter co-founder and former CEO Jack Dorsey. Musk took out loans to cover the rest of the deal, borrowing more than $12 billion that banks have not been able to offload, news outlets have reported.
“Elon’s done a tremendous amount of wealth destruction since he’s purchased Twitter,” said Ross Gerber, who said he invested less than $1 million, a stake he now considers worthless.
“For the people who put capital into him for any amount,” Gerber said, “ … trying to explain to people how he lost” so much money “is not a fun conversation.”
Among top investors, Dorsey — whose stake has lost an estimated $720 million — has made his displeasure known. Last year, he said Musk shouldn’t have purchased Twitter after all, posting on social media that he didn’t think Musk “acted right after realizing his timing was bad.”
“It all went south,” Dorsey said.
Source: The Washington Post
