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This comment has negative value because it’s casually dismissive but the author feigns knowledge of the subject matter but in fact misleads the reader. Fidelit

by MrMan 4y ago

This comment has negative value because it’s casually dismissive but the author feigns knowledge of the subject matter but in fact misleads the reader. Fidelity employs competent investment analysts. They have determined that twitter is worth less than half it was at the time Musk purchased it. This means Fidelities stake is worth less by the same percentage. None of this has anything to do with the size of Fidelities stake.

maxerickson 4y ago
If the analysts are tasked with getting blood from a turnip it doesn't matter how competent they are. Note that I'm not arguing that Twitter is worth more (or less) than they say it is, I'm arguing that they likely don't have access to information that makes their valuation particularly useful.
- doubleg72 4y ago
  Ha yeah, one of the largest financial firms doesn't have access to any useful information regarding their investments. This is quite possibly the most ridiculously ignorant comment I have read on HN.
  - braingenious 4y ago
    It’s kind of refreshing to see somebody blatantly carrying water for elmo without outright accusing anyone critical of his business acumen as spreading “FUD”
    - maxerickson 4y ago
      Misread, I'm making shit up about the visibility Fidelity has, not making a case for Twitter being worth more than they say. $44 billion was more than it was worth (ever) and the value has absolutely plummeted since ol' Musky took control.
      - braingenious 4y ago
        Do you have other examples about Fidelity being bad at valuing companies or… just this one? What is your process for figuring out how bad Fidelity is at valuing other private companies, given your personal insight? edit: Dyslexia fix
        maxerickson 4y ago
        "making shit up" I don't have a process, I just don't think they are spending a huge amount of time on a 0.02% holding. Like hey, maybe they do have special insight and are not just acknowledging a disaster by hugely marking down their estimate.
        braingenious 4y ago
        So, you don’t like to make shit up about Fidelity’s process outside of this specific Twitter valuation (which you have no option of)? lol
        1123581321 4y ago
        I don’t mean to pile on but what would make you conclude that about Fidelity’s analyst operation? It’s a 50k employee company. They have entire departments that do mark to market analysis and accounting. Plus it’s a newsworthy holding and they have access to peers at other firms that might hold more, and access to Twitter. I used to be part of a two man analyst department and even we’d have made time for this. :)
- mixdup 4y ago
  After the Musk transaction completed, at $44 Billion, they had a $19.66 Billion stake. That comes out to 44%. Ignoring the fact that even if they had only $100 million, they would've had just as much access to financial data as Elon himself, I guarantee at a 44% stake they had very intimate details of the financial health of Twitter before the transaction and still do after the transaction
  - maxerickson 4y ago
    My bad, the fund listing at the article says $8 million, which is what I used when I wrote the comment.
  - leereeves 4y ago
    $19.66 million, not billion.
- braingenious 4y ago
  > Note that I'm not arguing that Twitter is worth more (or less) than they say it is, I'm arguing that they likely don't have access to information that makes their valuation particularly useful. Wait, you don’t have any opinion about Twitter’s value, you’re just here impartially to say that you’re aware of Fidelity’s inner workings and are confident that they are likely wrong about Twitter’s value? Do you care to share your personal insights into any blunders by Fidelity that don’t involve Twitter?
  - maxerickson 4y ago
    I am not confident that they are wrong about Twitter's value, I'm confident that their valuation has huge error bars.
    - braingenious 4y ago
      What’s the size of the error bar on your confidence? Can you share how you gained this confidence?
      - deleted 4y ago
        [deleted]
      - boopboopbadoop 4y ago
        Sorry to interrupt your pitchfork campaign, but is there some set of information that we know this could be based off of, i.e. some sort of legally mandated report for shareholders of private companies? This is not my area of expertise nor am I in the US/familiar with US rules, but this thread has me curious.
        mccorrinall 4y ago
        Braingenious is not doing a pitchfork campaign but is actually right: https://www.bnnbloomberg.ca/twitter-buyout-loans-get-bid-at-60-cents-as-banks-sound-out-investors-1.1844762.amp.html https://www.bnnbloomberg.ca/twitter-buyout-loans-get-bid-at-...
- mccorrinall 4y ago
  Morgan Stanley has tried to sell some of their twitter shares for sixty cents on the dollar a few weeks ago.
  - FartyMcFarter 4y ago
    Wasn't that debt (loans) rather than shares?

by MrMan 4y ago

maxerickson 4y ago

If the analysts are tasked with getting blood from a turnip it doesn't matter how competent they are. Note that I'm not arguing that Twitter is worth more (or less) than they say it is, I'm arguing that they likely don't have access to information that makes their valuation particularly useful.

doubleg72 4y ago
Ha yeah, one of the largest financial firms doesn't have access to any useful information regarding their investments. This is quite possibly the most ridiculously ignorant comment I have read on HN.
- braingenious 4y ago
  It’s kind of refreshing to see somebody blatantly carrying water for elmo without outright accusing anyone critical of his business acumen as spreading “FUD”
  - maxerickson 4y ago
    Misread, I'm making shit up about the visibility Fidelity has, not making a case for Twitter being worth more than they say. $44 billion was more than it was worth (ever) and the value has absolutely plummeted since ol' Musky took control.
    - braingenious 4y ago
      Do you have other examples about Fidelity being bad at valuing companies or… just this one? What is your process for figuring out how bad Fidelity is at valuing other private companies, given your personal insight? edit: Dyslexia fix
      - maxerickson 4y ago
        "making shit up" I don't have a process, I just don't think they are spending a huge amount of time on a 0.02% holding. Like hey, maybe they do have special insight and are not just acknowledging a disaster by hugely marking down their estimate.
        braingenious 4y ago
        So, you don’t like to make shit up about Fidelity’s process outside of this specific Twitter valuation (which you have no option of)? lol
        1123581321 4y ago
        I don’t mean to pile on but what would make you conclude that about Fidelity’s analyst operation? It’s a 50k employee company. They have entire departments that do mark to market analysis and accounting. Plus it’s a newsworthy holding and they have access to peers at other firms that might hold more, and access to Twitter. I used to be part of a two man analyst department and even we’d have made time for this. :)
mixdup 4y ago
After the Musk transaction completed, at $44 Billion, they had a $19.66 Billion stake. That comes out to 44%. Ignoring the fact that even if they had only $100 million, they would've had just as much access to financial data as Elon himself, I guarantee at a 44% stake they had very intimate details of the financial health of Twitter before the transaction and still do after the transaction
- maxerickson 4y ago
  My bad, the fund listing at the article says $8 million, which is what I used when I wrote the comment.
- leereeves 4y ago
  $19.66 million, not billion.
braingenious 4y ago
> Note that I'm not arguing that Twitter is worth more (or less) than they say it is, I'm arguing that they likely don't have access to information that makes their valuation particularly useful. Wait, you don’t have any opinion about Twitter’s value, you’re just here impartially to say that you’re aware of Fidelity’s inner workings and are confident that they are likely wrong about Twitter’s value? Do you care to share your personal insights into any blunders by Fidelity that don’t involve Twitter?
- maxerickson 4y ago
  I am not confident that they are wrong about Twitter's value, I'm confident that their valuation has huge error bars.
  - braingenious 4y ago
    What’s the size of the error bar on your confidence? Can you share how you gained this confidence?
    - deleted 4y ago
      [deleted]
    - boopboopbadoop 4y ago
      Sorry to interrupt your pitchfork campaign, but is there some set of information that we know this could be based off of, i.e. some sort of legally mandated report for shareholders of private companies? This is not my area of expertise nor am I in the US/familiar with US rules, but this thread has me curious.
      - mccorrinall 4y ago
        Braingenious is not doing a pitchfork campaign but is actually right: https://www.bnnbloomberg.ca/twitter-buyout-loans-get-bid-at-60-cents-as-banks-sound-out-investors-1.1844762.amp.html https://www.bnnbloomberg.ca/twitter-buyout-loans-get-bid-at-...
mccorrinall 4y ago
Morgan Stanley has tried to sell some of their twitter shares for sixty cents on the dollar a few weeks ago.
- FartyMcFarter 4y ago
  Wasn't that debt (loans) rather than shares?