quote:
Twitter’s value has plummeted by almost two-thirds since Elon Musk acquired the company in October 2022, one of the social media company’s only remaining external investors has admitted. Fidelity, an asset manager that held a stake in Twitter worth about $20m after Musk acquired the business for $44bn, said in a corporate filing that its stake was now worth just under $6.6m. That would value the overall company, now officially called X Holdings Corp after Musk’s early venture X.com, at just $14.75bn.

Anyone using this as a legit excuse for saying Musk is mismanaging Twitter really doesn’t understand corporate finance. Fidelity is able to massage that number to lower the cost of equity on their books. Since it’s private, they have plenty of leeway in valuing Twitter. By writing it down, they can use the “loss” to offset equity gains elsewhere, thus reducing taxes. It also allows them to record a gain on Twitter later on.

On a separate note, I don’t think Musk really cares if he loses money on Twitter. It’s pretty obvious that the 1st amendment is sacrosanct to him.

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Posted by Big EZ Tiger

Member since Jul 2010

24285 posts

Posted on 11/29/23 at 7:43 pm to Free888

quote:
On a separate note, I don’t think Musk really cares if he loses money on Twitter. It’s pretty obvious that the 1st amendment is sacrosanct to him.

Clearly he doesn't give a shite about that. If he did, he would kiss advertisers asses like nothing else and try to make nice with everyone instead of pissing people off and showing that he doesn't care what they think or do.

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Posted by Samso

nyc

Member since Jun 2013

4735 posts

Posted on 11/29/23 at 11:50 pm to Free888

quote:
Anyone using this as a legit excuse for saying Musk is mismanaging Twitter really doesn’t understand corporate finance. Fidelity is able to massage that number to lower the cost of equity on their books. Since it’s private, they have plenty of leeway in valuing Twitter. By writing it down, they can use the “loss” to offset equity gains elsewhere, thus reducing taxes. It also allows them to record a gain on Twitter later on.

So you are claiming one of the largest asset managers in the world will fudge their valuation of a highly publicized investment, which is audited every fiscal year, and highly immaterial to their bottom line so they can reduce their tax burden??

How can they reduce their taxes without a taxable event (i.e selling their stake in Twitter)???