The current valuation of Twitter fell to 20 billion USD, which is half the amount he paid for the acquisition of the social media platform just five months ago. It has been reported by an internal email shown by valid news sources.
The email to the employees involved the new stock compensation program in the San Francisco company and the contribution of the company’s stocks to X holdings, Twitter’s umbrella company, after Elon Musk acquired Twitter in late October.
The plan of compensation has valued the social media platform at 20 billion USD, which has a slightly larger valuation than that of Snap, accounting for 18.2 billion USD. Snap is the parent company of Snapchat and the social and creative network of Pinterest, both of which, unlike Twitter, are traded publicly.
An email query by the valid media sources has been sent to Twitter’s communication department, which generated an automatic response in the form of Twitter’s poop emoji.
Musk has described the decline in the valuation of Twitter in an email. He has added that the platform has faced such grave financial shortcomings that it was on the verge of bankruptcy.
Musk opened up in a message on Saturday on the platform stating that Twitter was bound to lose 3 billion USD every year. He has mentioned that the revenue fell by 1.5 billion USD in a year and the debt-servicing burden of the same amount has left the company with four months of the money.
Elon Musk has stated the situation was dire, being Twitter’s shareholder. However, the company will break because the advertisers who have fled after his acquisition of Twitter have returned to the platform.
Since his authority, Elon Musk has cut down the company’s payroll and slashed employees from 7500 to less than 2000 employees.
He has even mentioned in an email that the company seeks a clear and difficult path to attain a valuation of 250 billion USD, without saying how long it may take to achieve profits.
Elon Musk offers stock grants for Twitter, accounting for 20 billion USD:
Musk, the chief executive of Tesla Inc. and SpaceX, the aerospace group, has stated that Twitter would allow the employees of the social media platform to convert the shares of the group every six months.
He has even added that the employees will receive stock-based awards at a valuation of 20 billion USD. It is less than half of the 44 billion USD spent by him in the acquisition of Twitter in October of last year.
He has shared his optimism about the social media platform stating that the company’s future is not evident to the employees. He has added that the shares awarded will be valued by ten times.
Mr. Musk has addressed that Twitter is experiencing massive changes, so it can be concluded that the company is an inverse startup. The changes will prevent the social media platform from undergoing bankruptcy.
According to a separate email sent to employees on Friday, the company is providing capital grants to employees, which will initiate to vest after six months. It went on to say that the company plans to hold a liquidity event in a year or so, during which employees will be able to profit from some of their equity. No data was provided about the number of staff who will receive awards of equity.
The former employees have stated that the social media platform often provided stock grants as part of employee payment. The new grants are separate from the legal Twitter equity that has been converted to cash at the time of acquisition in October 2022 and will last for four years, according to the email.
According to regulatory filings, the social media platform spent approximately $630 million on stock-based remuneration in 2021, the last full year before going private.
Edited by Prakriti Arora
