On Friday, Elon Musk sent an email to Twitter employees announcing a new stock compensation program. In the email, Musk stated that Twitter’s value is now about $20 billion. A significant drop from the $44 billion he paid to buy the social network in October. Musk warned workers that Twitter is still in a precarious financial position. And had been four months away from running out of money. He said that “radical changes” were necessary to avoid bankruptcy and streamline operations. Musk adds that the company could be like “an inverse startup.”
Elon Musk’s Acquisition of Twitter Loses Half Its Value, Now Valued at $20 Billion
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Twitter’s value has dropped as Musk has dramatically overhauled the company. He took Twitter private in October, which means it is no longer have to provide transparency about its finances. However, he has indicated publicly that the company lost revenue as advertisers fled the social network after his takeover. And suggested that Twitter was in danger of bankruptcy.
The $20 billion figure values Twitter slightly higher than Snap, the parent company of Snapchat. Snap has recently struggled with an advertising slump and predicted its revenue would fall. Snap has about 375 million daily active users. Compared with Twitter’s 237.8 million in the brand’s final public disclosure before it went private.
According to Musk’s email about the new stock compensation program, Twitter employees will receive stock in X Corporation, the holding company he used to buy the company. Those awards will be granted under the $20 billion value. Musk also said in the email that he believed Twitter could someday be worth $250 billion. Twitter plans to allow employees to sell the stock every six months, similar to SpaceX. The sales of private stock would allow employees to have “liquid stock, but without the stock price chaos and lawsuit burdens of a public company,” Musk wrote.
Also, Musk did not respond to a request for comment. And an email to Twitter’s communications department was returned with a poop emoji. The company’s new valuation was earlier reported by The Information.