# Now that Elon Musk has bought Twitter - now the Pit edition (Part 1) **URL:** \ **Category:** The BBQ Pit\ **Created:** [April 25, 2022, 10:50pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442 "2022-04-25T22:50:17Z")\ **Posts on this page:** 20\ **Page:** 124
**Author:** ![Gatopescado](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/gatopescado/32/5711_2.png) [@Gatopescado](https://boards.straightdope.com/u/Gatopescado)\ **Post date:** [December 31, 2022, 11:47pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/2462 "2022-12-31T23:47:18Z")
> [@bobot](#): > > Found this on the interwebs Damn, this is funny! Deserves an award for whatever award they give out for this kind of thing. ---
**Author:** ![BeepKillBeep](https://avatars.discourse-cdn.com/v4/letter/b/9e8a1a/32.png) [@BeepKillBeep](https://boards.straightdope.com/u/BeepKillBeep)\ **Post date:** [January 1, 2023, 3:04am UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/2463 "2023-01-01T03:04:47Z")
> **[Fidelity marks down value of Twitter stake by 56%](https://www.reuters.com/technology/fidelity-marks-down-value-twitter-stake-by-56-2022-12-30/)** > > Fidelity funds slashed the value of their Twitter stake by 56% in November, according to a monthly disclosure by the investment firm released on Friday, as the social media giant navigates a period of turmoil following Elon Musk's $44 billion buyout. Fidelity has reduced the value of Twitter by a little over half from 20ish billion to 9ish billion. ---
**Author:** ![squeegee](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/squeegee/32/14537_2.png) [@squeegee](https://boards.straightdope.com/u/squeegee)\ **Post date:** [January 1, 2023, 3:10am UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/2464 "2023-01-01T03:10:24Z")
Million, per that story. They apparently have a fairly small stake. This is them reporting a loss (or reduced profit) on their ledger. ---
**Author:** ![BeepKillBeep](https://avatars.discourse-cdn.com/v4/letter/b/9e8a1a/32.png) [@BeepKillBeep](https://boards.straightdope.com/u/BeepKillBeep)\ **Post date:** [January 1, 2023, 3:24am UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/2465 "2023-01-01T03:24:08Z")
You’re right, sorry, I had my Bs and Ms mixed up. I’ll blame it on being sick. ---
**Author:** ![wolfpup](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wolfpup/32/10618_2.png) [@wolfpup](https://boards.straightdope.com/u/wolfpup)\ **Post date:** [January 1, 2023, 3:45am UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/2466 "2023-01-01T03:45:28Z")
> [@k9bfriender](#): > > Any way to get the company to put in some custom sounds for a nominal fee? That was the whole point of the Elmo Hooray 3-in-1 Potty! I envisioned, for instance, the Potty saying “I will establish a Twitter Trust and Safety Council”, followed by a flushing sound. We could also license the voice of Carl Sagan intoning “billions and billions”, followed by a flushing sound. The possibilities of the Elmo Hooray 3-in-1 Potty are endless! ---
**Author:** ![Riemann](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/riemann/32/3133_2.png) [@Riemann](https://boards.straightdope.com/u/Riemann)\ **Post date:** [January 1, 2023, 3:47am UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/2467 "2023-01-01T03:47:58Z")
> [@BeepKillBeep](#): > > Fidelity has reduced the value of Twitter by a little over half That a very optimistic mark-to-market. Even absent Elon, look at what the rest of the tech sector has done since he made his offer in April. Even if Elon had not bought it, Twitter would be down by 30% or more. With the Elon clusterfuck I’d say they’d be lucky to find someone to pay them 25% of what they paid for their stake. ETA: Actually, reading the article, that 56% markdown is relative to where they marked it in October. That would already have been well below the actual buyout price. ---
**Author:** ![Folacin](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/folacin/32/3195_2.png) [@Folacin](https://boards.straightdope.com/u/Folacin)\ **Post date:** [January 1, 2023, 1:17pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/2468 "2023-01-01T13:17:54Z")
> [@Riemann](#): > > That a very optimistic mark-to-market. I always assumed that they just take the close-of-market price on whatever day of the month they report the fund value? Private equity they need to set a value based on whatever they use to set the value, but a publicly traded stock seems pretty easy, no? ---
**Author:** ![LSLGuy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lslguy/32/5813_2.png) [@LSLGuy](https://boards.straightdope.com/u/LSLGuy)\ **Post date:** [January 1, 2023, 3:00pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/2469 "2023-01-01T15:00:46Z")
Yeah. Color me confused about the accounting substance of the announcement. ---
**Author:** ![puzzlegal](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/puzzlegal/32/3827_2.png) [@puzzlegal](https://boards.straightdope.com/u/puzzlegal)\ **Post date:** [January 1, 2023, 3:14pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/2470 "2023-01-01T15:14:21Z")
> [@Maserschmidt](#): > > Here in MA I only know two Tesla owners, and both are Romney Republicans…right, but not necessarily crazy. I know a lot of Tesla owners. All but one of them really like playing with technology. The other is a longtime EV proponent, who was buying custom EV vehicles when there weren’t any mass-marketed ones. The last one i spoke with was apologetic, but still likes his car. (he was giving me a ride in a rental car, and kept complaining about features it didn’t have that his Tesla has.) His take was that Musk makes products that appeal to musk. My friend and Musk have similar preferences re cars, so he likes the car. They have very different preferences re social media, so my friend is cranky about what Musk has done to Twitter. He lights out that the preferences of a celebrity with a zillion followers are very different from the preferences of most people who use Twitter. ---
**Author:** ![Riemann](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/riemann/32/3133_2.png) [@Riemann](https://boards.straightdope.com/u/Riemann)\ **Post date:** [January 1, 2023, 4:49pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/2471 "2023-01-01T16:49:49Z")
> [@Folacin](#): > > I always assumed that they just take the close-of-market price on whatever day of the month they report the fund value? Private equity they need to set a value based on whatever they use to set the value, but a publicly traded stock seems pretty easy, no? Twitter is no longer publicly traded. ---
**Author:** ![Jophiel](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jophiel/32/66_2.png) [@Jophiel](https://boards.straightdope.com/u/Jophiel)\ **Post date:** [January 1, 2023, 5:14pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/2472 "2023-01-01T17:14:07Z")
You might not like Musk but you can’t take his achievements away from him. For instance, being the first person in history to [lose $200 billion](https://www.bloomberg.com/news/articles/2022-12-30/elon-musk-becomes-first-person-ever-to-lose-200-billion) in net worth > Elon Musk was the second person ever to amass a personal fortune of more than $200 billion, breaching that threshold in January 2021, months after Jeff Bezos. > > The Tesla Inc. chief executive officer has now achieved a first of his own: becoming the only person in history to erase $200 billion from their net worth. > > Musk, 51, has seen his wealth plummet to $137 billion after Tesla shares tumbled in recent weeks, including an 11% drop on Tuesday, according to the Bloomberg Billionaires Index. His fortune peaked at $340 billion on Nov. 4, 2021, and he remained the world’s richest person until he was overtaken this month by Bernard Arnault, the French tycoon behind luxury-goods powerhouse LVMH. ---
**Author:** ![kaylasdad99](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kaylasdad99/32/3398_2.png) [@kaylasdad99](https://boards.straightdope.com/u/kaylasdad99)\ **Post date:** [January 1, 2023, 5:18pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/2473 "2023-01-01T17:18:34Z")
> [@Riemann](#): > > > [@Folacin](#): > > > > I always assumed that they just take the close-of-market price on whatever day of the month they report the fund value? Private equity they need to set a value based on whatever they use to set the value, but a publicly traded stock seems pretty easy, no? > > Twitter is no longer publicly traded. That means Musk owns the whole thing, doesn’t it? In that case, how does Fidelity even _have_ a stake? ---
**Author:** ![Riemann](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/riemann/32/3133_2.png) [@Riemann](https://boards.straightdope.com/u/Riemann)\ **Post date:** [January 1, 2023, 5:34pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/2474 "2023-01-01T17:34:57Z")
Musk’s holding company “X Holdings I Inc” is the new owner of Twitter, having bought all of the publicly traded Twitter shares when the deal went through. Some investors who held Twitter shares decided they wanted in on the deal as a continuing private investment, so they “rolled over” into an interest in the new holding company. It looks like the Saudi fund (5% interest) and Dorsey (2.4%) were two big ones. I’m not sure if the information is all public, but it doesn’t look like it amounts in total to more than 10%, so Musk owns most of it. There was also substantial debt involved in the purchase, I don’t know all the details of that, whether it’s all junk secured only against the value of the business or whether any of it is secured against Musk’s other assets. If Fidelity now want out, they need to sell their private investment in X Holdings I Inc, so their mark-to-market should be what a hypothetical private equity investor would pay for that. ---
**Author:** ![Euphonious\_Polemic](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/euphonious_polemic/32/3002_2.png) [@Euphonious\_Polemic](https://boards.straightdope.com/u/Euphonious_Polemic)\ **Post date:** [January 1, 2023, 6:30pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/2475 "2023-01-01T18:30:38Z")
> [@Riemann](#): > > If Fidelity now want out, they need to sell their private investment in X Holdings I Inc, so their mark-to-market should be what a hypothetical private equity investor would pay for that. Next year this time, I expect Fidelity to value their investment in Twitter as “One bucket spit, warmed” ---
**Author:** ![Riemann](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/riemann/32/3133_2.png) [@Riemann](https://boards.straightdope.com/u/Riemann)\ **Post date:** [January 1, 2023, 6:33pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/2476 "2023-01-01T18:33:26Z")
The article refers to Nov month end. It might well be that they have more stringent criteria for valuation at year end, that could be interesting. ---
**Author:** ![CaveMike](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cavemike/32/16379_2.png) [@CaveMike](https://boards.straightdope.com/u/CaveMike)\ **Post date:** [January 1, 2023, 7:00pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/2477 "2023-01-01T19:00:50Z")
To add to this clarification, the markdown in this story is about a single Fidelity fund that has private ownership in Twitter. Each fund has to assess and adjust the value of their private holdings. Fidelity is supposed to have invested $316M in Twitter so there are many other funds to update. ---
**Author:** ![Red\_Wiggler](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/red_wiggler/32/13190_2.png) [@Red\_Wiggler](https://boards.straightdope.com/u/Red_Wiggler)\ **Post date:** [January 1, 2023, 9:36pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/2478 "2023-01-01T21:36:26Z")
Anecdotal to be sure but my feed is a hot disjointed mess today. If I was a suspicious person, I might suspect that I’m getting fucked with. Wait, I AM a suspicious person; I’m getting fucked with. ---
**Author:** ![Riemann](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/riemann/32/3133_2.png) [@Riemann](https://boards.straightdope.com/u/Riemann)\ **Post date:** [January 1, 2023, 9:56pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/2479 "2023-01-01T21:56:38Z")
> [@Red\_Wiggler](#): > > If I was a suspicious person, I might suspect that I’m getting fucked with. Wait, I AM a suspicious person; I’m getting fucked with. Then it may be your own fault. Twitter may have an algorithm to detect suspicious people and fuck with them. ---
**Author:** ![JohnT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/johnt/32/15048_2.png) [@JohnT](https://boards.straightdope.com/u/JohnT)\ **Post date:** [January 1, 2023, 10:04pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/2480 "2023-01-01T22:04:24Z")
> [@LSLGuy](#): > > Color me confused about the accounting substance of the announcement. Most likely, as we can figure out and would do ourselves, they’re just declaring the loss as to offset some gains elsewhere. A 56% loss through November sounds about right, and their stake is so small the entire holding is a rounding error in the grand scheme of things. One thing this does for them is allow Fidelity to take a PR position that _they_ take compliance and risk management seriously - “why, our compliance rules are so strict we even immediately started taking losses on Twitter!” Now, this might be bullshit on a company-wide scale, but a story like this will get noticed (Fidelity will make sure of this) by regulators. I mean, who do you think fed the press this story? 😁 Hell, to me, the above reason alone is worth an $11 million loss. ---
**Author:** ![Riemann](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/riemann/32/3133_2.png) [@Riemann](https://boards.straightdope.com/u/Riemann)\ **Post date:** [January 1, 2023, 10:15pm UTC](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442/2481 "2023-01-01T22:15:49Z")
I think you’re reading too much into it. It wasn’t an “announcement”, some diligent reporter pulled it out of a routine monthly disclosure, because obviously the world is fascinated by the clusterfuck and seeing how much value Musk has destroyed. It’s a completely routine matter that positions must be marked to market, and nobody would expect anything less from any reputable firm. Fidelity seeking PR from rigorously marking positions to market would be like a law firm advertising that conversations with clients are confidential. It would be more like - WTF - why do you feel the need to _say_ that? And again, the 56% is only since October month end, which I’m sure would already have been marked well below the buyout price. I don’t know how dire the debt situation is for equity participants, but I doubt that there’s any private equity bid better than 25% of the buyout price, even that is probably optimistic. It’s likely that the debt means that it must be restructured to avert complete collapse, and current equity holders are left with almost nothing. [Previous page](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442.md?page=123) [Next page](https://boards.straightdope.com/t/now-that-elon-musk-has-bought-twitter-now-the-pit-edition-part-1/963442.md?page=125)