NVDA
NVIDIA
-- 104.870 TSLA
Tesla
-- 247.100 PLTR
Palantir
-- 80.785 AMZN
Amazon
-- 186.460 GOOG
Alphabet-C
-- 154.130 
Will Musk do for America what he did for Twitter? Here's what the numbers say.
Elon Musk is being treated by lots of people - including Donald Trump - as a cost-cutting genius. That's why Trump has put Musk and Vivek Ramaswamy in charge of coming up with plans to drastically slash federal government expenditures.
But when you look at what's happened to the value of X, the platform formerly known as Twitter, since Musk bought control of it two years ago and fired 80% of its employees, you see that his cost-cutting crusade has turned into a financial fiasco for him and his 19 coinvestors.
It's important to understand what Musk has wrought at X because he will be trying to do to America what he did to Twitter. And the massive mess that Musk has created at X hasn't gotten anything like the attention it deserves.
Here's a reminder.
According to the most recent available numbers, Musk and his co-investors have lost more than USD25 billion on their Twitter takeover.
How can I know that when X is a private company that doesn't release financial results? It's because Musk's coinvestors include the Fidelity group of mutual funds. Fidelity, you see, is required to value its funds' holdings in X at their market value rather than at their cost because investors buy and sell mutual fund shares based on the shares' net asset value.
According to Fidelity's financial filings, its funds' stake in X has fallen almost 80% in value since the Musk takeover. For example, Fidelity's Contrafund (FCNTX) valued its stake at USD53,469,000 when Twitter morphed into X in Oct 2022 but valued that stake at only USD11,383,550 as of Sep 30, the most recent available number.
Buying Twitter was a USD46.5 billion deal: USD44 billion went to shareholders and about USD2.5 billion went to expenses. Musk and his coinvestors put about USD33 billion into the takeover, with X borrowing the remaining USD13.5 billion.
Apply a 78.7% drop to that USD33 billion investment, and you see that Musk and his coinvestors are down about USD26 billion. Of this, about USD20.4 billion is Musk's portion of the loss, and the other USD5.6 billion is the coinvestors' loss.
Obviously, I can't prove that Musk eviscerating 80% of Twitter's workforce is responsible for the almost 80% loss that Musk et al. have suffered. No one can. But the evisceration of the workforce and the subsequent evisceration of X's value certainly raises the question of whether Musk can be trusted to cut federal spending to the bone without inflicting massive damage on tens of millions of people.
We're all entitled to answer that question in our own way. But even though Musk is arguably the most successful investor of our time, to me the Twitter/X numbers are telling us that the answer to this question is "no."
(Disclosure: I have bought one share of Musk's Tesla and one share of Trump Media & Technology Group to give me guaranteed access to the companies' shareholder documents. I'll donate any profits to charity.)
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
Read more
Comment
Sign in to post a comment
bullrider_21
Moo Contributor
Follow me to get useful analysis, learn TA and make profitable trades.
Maximise profit 利润最大化
12K
Followers
55
Following
34K
Visitors
Follow
MonkeyGee : I just can't wait for the cuts to begin. But one thing Elon will have to learn is that dealing with government employees is a lot different than corporate employees. These dead beats will drain your life dealing with them!
73372627 : What you wrote it is bad propaganda against Tesla. Here the stake of fidelity.
TESLA INC class COM value 20,926,693,000 change +360,524,000 change in % 1.753 share held 59,356,401
Fidelity Tesla investments are done true and managed by Geode Capital Management, Llc.
What you come to say here it is b****sht. I understand that in HK you do not like Tesla but what you wrote it is misinformation, and a propaganda to infuence the investors.
You must not be contributor for MooMoo, an honest company. You are a disgrace. Keep those fake informations for yourself.
Do you need the date when they buy more??? OK:
September 30 buyed 1,022,589 shares
So no value in theirs book, but buy more. Make articles for Chinese stocks.
bullrider_21 OP 73372627 : What you say is bulls***. It is just Western propaganda. I know you are a Tesla bull who believes all the lies Musk says.
104264569 bullrider_21 OP : 你的话缺乏逻辑