Fidelity again marks down its Twitter shares

Fidelity today disclosed that it marked down the value of its Twitter shares by 7.9% during the month of February, or a total of 63.46% since Elon Musk's $44 billion acquisition closed last October.

Why it matters: One of the largest tech buyouts of all time continues to depreciate, according to a firm that helped to finance it.

By the numbers: Fidelity slashed the carrying value of its Twitter shares by 56% at the end of November 2022, and then by another 9.6% one month later. It kept the shares steady during January, before again reaching for its red pen.

• Musk's takeover included $33.5 billion in equity plus $13 billion in debt, with the extra to cover closing and associated costs.
• Applying the Fidelity markdown to the applicable equity, and keeping the debt/liability value stable, Twitter's enterprise value would have been around $24.3 billion at the end of February.
• That's more generous than Musk's own view, or perhaps just reflecting the monthly lag, as he reportedly told Twitter employees that the company is now worth $20 billion.

The bottom line: Fidelity isn't necessarily privy to nonpublic information in making its determinations. Instead, it may be incorporating public market comps like Snap, which lost 66.1% of its market cap since April 25, 2022 (the day Musk signed his Twitter deal). Worth noting, however, that Snap's share price fell only 2.1% during February.