Six months after buying Twitter for $44 billion, Elon Musk has valued the social media giant at $20 billion, according to an email obtained by The New York Times. This massive drop came as Musk told remaining employees that they were “highly regarded.”
Twitter value down
Musk’s email was sent to Twitter employees on Mar. 24, announcing a new stock compensation program. However, he also warned them that the site was in a “precarious financial position,” Engadget wrote.
“Twitter is being reshaped rapidly,” Musk wrote, adding that the company could be considered “an inverse start-up,” The New York Times reported.
Zoe Schiffer, managing editor of Platformer, tweeted Saturday that Musk told the staff at Twitter that the company had been “about four months away from running out of money. Now, he says, the financial incentives of employees should align with the company.”
She also said that Musk sees a “clear but difficult path” to being valued at $250 billion, which could potentially boost Twitter’s current stock grants’ worth up to “10 times as much” in the future. Musk also said that Twitter would allow employees to sell stock every six months, while also giving them “liquid stock” and protecting them from the “price chaos” with equity at a traded company.
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Following a series of layoffs in February, Musk reportedly sent a memo to the remaining employees with the subject line “Performance Awards,” stating that they would get “very significant” performance-based stock awards, Business Insider reported.
“This past week, we completed a difficult organizational overhaul focused on improving future execution,” Musk wrote. “Those who remain are highly regarded by those around them.”
As Musk works to overhaul the company, Twitter’s value continues to fall. In October, he took Twitter private, depriving the company the ability to publicly reveal its finances. Yet, Musk publicly hinted that Twitter’s daily revenue dropped by 40 percent from the previous year after more than 500 advertisers parted ways from the company, possibly bringing it closer to bankruptcy.
This came after the buggy relaunch of Twitter Blue after verified trolls flooded the service by impersonating brands. According to The Information, only 180,000 Twitter Blue subscribers in the U.S. remained in early February; evidence that Twitter is unable to make a recovery after Musk’s takeover.
In an email about the new stock compensation program, Twitter employees will get stock in X Corporation, which was used by Musk to buy Twitter.
With the dropped value, Twitter is valued slightly higher than Snap, the company that owns Snapchat, which also faced problems with failing advertising and an expected fall in revenue. Yet, Snap possesses around 375 million daily active users, while Twitter has 237.8 million daily active users in its final public disclosure before Musk took the company private.