In my mind it kind of seems like the value as a public company was (at time of purchase, at least) $44 billion, but Fidelity’s internal analysts have decided that if it were to be sold today it would go for about half that?
Not quite. It depends on which exact accounting method they're using, but the most vanilla version would usually look like this: as long as they belive that Twitter will survive as a company, they will apply 'going concern' valuation [0]. So they try to estimate the value that the company will generate for its owners. Such value could materialize eg in the forms of dividends or share buybacks. Technically, they will try to estimate the company's potential to make such distributions.
If they believed that Twitter was eg insolvent, they would apply 'gone concern' valuation, so they would try to estimate for how much each of the company's assets would sell, assuming that the company itself would vanish. Other accounting methods would include eg 'mark-to-market' (for publicly traded assets) or eg 'mark-to-model' (more common for financial instruments without a market price).
There was an offer at the price, which the board jumped at and the buyer had immediate remorse and tried to avoid until legally compelled; that rather suggests tbe sale price was a upper rather than lower bound on the actual FMV.
Is it like if I bought a stake in a bag of apples but only my apple went bad?
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.
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?
Can you share how you gained this confidence?
$44 billion was more than it was worth (ever) and the value has absolutely plummeted since ol' Musky took control.
What is your process for figuring out how bad Fidelity is at valuing other private companies, given your personal insight?
edit: Dyslexia fix
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.
I used to be part of a two man analyst department and even we’d have made time for this. :)
The meaning is in the fact that Fidelity has people well placed to use public info to make good guesses about the market value. We can safely assume they're better at it than most of us.