Musk’s Twitter investors have lost billions in value

At the time, analysts marveled at Musk’s abilityto 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 ashalf 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.

But Alwaleed, X’s biggest investor after Musk himself, said in an interview with The Post that he values his and Kingdom Holding Co.’s X stake the same as when Musk took over the site: $1.9 billion, a figure he said was a “conservative” estimate.

“In our books, on my books personally, we are valuing at minimum [at] the entry level that we entered with,” he said last week. “There’s no devaluation whatsoever.”

The largest investors — those with stakes of $250 million or more — received the right to confidential business information as part of the deal, prompting concerns in Washington about the involvement of entities associated with foreign governments and their potential access to user data. Alwaleed said he received no concessions or formal influence as part of his agreement to invest, calling his motives purely financial. A spokesperson said Alwaleed and Kingdom Holding Co., which the prince chairs, receive the same set of business information available to other X and xAI investors.

Alwaleed, who said he and his team are in frequent contact with Musk, X CEO Linda Yaccarino and Jared Birchall, head of Musk’s family office, said outside valuations that suggest massive losses do not take into account X’s bets through xAI, Musk’s artificial intelligence start-up. Alwaleed and Kingdom Holding Co. have become one of xAI’s largest investors.

“When you evaluate X, you have to evaluate their ownership in xAI of 25 percent,” Alwaleed said. He also said X needs to prioritize revenue. “Clearly, the game right now is monetization, having advertisers coming to X.”

As a major shareholder in Twitter, Alwaleed initially opposed Musk’s purchase — not because he was “against Musk,” he said, but because he thought Musk’s offer of $54.20 per share was too low.

“My first call with Musk was: I was fighting to stay in the company,” he said, citing his belief that Twitter was worth more.

Because Musk turned Twitter into a private company, it’s hard to know its up-to-the-minute valuation. But some things about its financial picture are clear: Advertisers, its key source of revenue, fled after controversies — some caused by Musk himself. Some advertisers were also put off by his decision to gut content moderation while restoring thousands of accounts previously suspended for breaking the site’s rules.

The deal has also faced scrutiny. The SEC has an active fraud probe into Musk’s purchase of the site, examining his early accumulation of Twitter shares without disclosing his investment — a move that could have affected the share price. Some investors have received subpoenas as part of the probe.

Here’s are the largest initial investors in the deal, what their stakes were worth when they bought in and what they’re worth today, extrapolating from Fidelity’s calculations.