BlackRock Reduces Automattic Stake Valuation by 10%
Asset management giant BlackRock has marked down its investment in Automattic, the parent company of WordPress.com, by 10% according to its latest quarterly disclosure. This adjustment reflects growing market uncertainties surrounding the web hosting provider.
Key Details of the Valuation Change
- Previous valuation: $41.7 per share (early 2024)
- New valuation: $37.5 per share
- Investment round: Series E (2021)
- BlackRock’s stake: 0.6% (non-voting shares, per CEO Matt Mullenweg)
The Context Behind the Devaluation
The valuation shift coincides with Automattic’s high-profile legal battle with WP Engine, its major compe***** in WordPress hosting services. The conflict escalated when:
- Automattic blocked WP Engine’s access to WordPress.org (the open-source platform hosting themes/plugins)
- WP Engine filed a lawsuit against Automattic and Mullenweg
- WP Engine is currently seeking a preliminary injunction to restore access
Why This Matters for Investors
While BlackRock’s stake is relatively small, the markdown signals:
- Market uncertainty: Legal disputes create volatility in tech investments
- Sector challenges: Competitive pressures in web hosting may impact valuations
- Investor confidence: Large asset managers adjusting valuations can influence market perception
This development highlights how corporate conflicts can affect investor valuations, even for established tech companies like Automattic. Industry watchers will be monitoring both the legal outcome and any further valuation adjustments in coming quarters.
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