How Much Is Twitter Worth In 2023? Will It Survive?

Even when Elon Musk first purchased Twitter, he said he was “obviously overpaying,” revealing a bit of remorse over the deal. However, he remained optimistic about the future, saying that the “long-term potential” was “an order of magnitude greater” than its value at the time of purchase. The question is, does he still believe it was worth it in the face of a 56% valuation cut by Fidelity and consistent trouble caused by his actions surrounding Twitter?

How much was Twitter worth then compared to now? When Musk acquired Twitter, he took it private, so stock prices are no longer available to make an easy judgment on the company’s worth. However, a Fidelity regulatory filing revealed information that gives some clues as to the company’s current worth.

When Musk went through with the purchase of Twitter in October 2022, spending $44 billion to acquire ownership, Fidelity valued its own Twitter shares at around $53 million. But just a month later, on November 30th, Fidelity took another look at the shares it owned and dropped the valuation to around $23 million.

• Converted into a percentage, the total drop in valuation is over 56%.
• Fidelity reported the change in valuation in other mutual fund disclosures.
• While a shareholder, Fidelity does not have in-depth knowledge of the inner workings of Twitter.

What has caused the valuation to drop? There are a lot of reasons for the decline, including the tech landscape as a whole. However, Musk’s actions since the takeover have been polarizing. He cut a tremendous amount of staff, only to be met with a Chinese spam campaign and other problems, and he took several actions that incurred backlash, including the ban of journalists from the platform.

Musk has been vocal about the problems. He previously warned people that Twitter could go bankrupt, telling employees to brace for difficult times. He even compared it to an airplane “headed toward the ground at high speed with the engines on fire and the controls don’t work.”

Musk has taken significant steps to cut costs. The steps include further downsizing, as well as the shutdown of one of Twitter’s primary data centers. Moreover, the company stopped paying millions in rent and services, which were to be renegotiated or dropped entirely.

• Twitter was sued by its landlord, Columbia Property Trust, for not paying rent for a floor leased to the company.
• Musk has cut janitorial and security services, and there have been reports of some employees having to bring their own toilet paper.

Cutting costs might help, but there are consequences. Quality of life for employees has dropped, and with more being cut, the pressure is heightened for those sticking around. That pressure could see more people leave the company if things continue going the same way.

Additionally, Twitter has faced problems with its services, experiencing a temporary outage that might have been avoided if the data center it shut down was still operational. Combined with Musk’s polarizing actions, the decline in the quality of service has the potential to send even more people to other platforms.

Musk will likely not be CEO for long. The decision started with one of his polls, where he asked if he should step down as the CEO of Twitter, to which a majority of the voters responded yes. Musk said that he will stand by the result and is supposedly in the process of looking for a new CEO. Whether a CEO change will affect the direction of the company is unknown.