Fidelity Boosts Stake in X by 32%
In a surprising move, Fidelity has increased its stake in Elon Musk’s company X by an impressive 32.37% in October. This development was reported by Axios, shedding light on the financial activities of the investment giant.
Significant Decrease in Valuation
Despite this significant increase in stake, Fidelity still values X at a whopping 72% less than the $44 billion price tag Musk paid for it back in 2022. This valuation contrast raises questions about the company’s current standing and potential future growth.
Connection to xAI and Recent Investments
Axios suggests that Fidelity’s decision to boost its stake in X may be linked to xAI, an AI startup founded by Musk. Earlier this year, Fidelity invested in xAI’s $6 billion Series B, showing a clear interest in Musk’s ventures beyond X. The firm also marked up its xAI shares by 70% in October, indicating a positive outlook on the AI company’s performance.
Impact of Presidential Election and Competition
Interestingly, Fidelity’s stake increase in X occurred before Donald Trump’s victory in the presidential election. Trump’s promise to appoint Musk as the head of a new Department of Government Efficiency may have influenced the market dynamics surrounding X. The election resulted in a surge in traffic for X, but it also led to a migration of millions of users to rival platforms like Bluesky, highlighting the competitive landscape X operates in.
As Fidelity’s investment decisions continue to shape the financial landscape of X and xAI, the future of these companies remains uncertain amidst changing market conditions and political developments. The intricate web of connections between key players in the tech industry adds complexity to the narrative of innovation and investment in the digital age.