Business

Elon Musk values Twitter at $20 billion in stock grant offer to employees

The reported valuation is less than half of the $44 billion that Musk paid to acquire the social media platform, pointing to a drop in Twitter's value

PGurus Newsdesk

March 26, 2023

The reported valuation is less than half of the $44 billion that Musk paid to acquire the social media platform, pointing to a drop in Twitter's value

Elon Musk puts $20 billion value on Twitter

Twitter CEO Elon Musk has offered company employees stock grants at a nearly $20 billion valuation. According to a report, this valuation is less than half of the $44 billion that Musk had paid to acquire the social media platform.

“I see a clear, but difficult, path to a >$250B valuation,” he told employees in an email. Twitter is being reshaped so that the company “can be considered an inverse startup,” he said.

In a separate email, Twitter told employees it is offering new equity grants to staff that will start to vest after six months.

In about a year, the company will offer a liquidity event in which they can cash out some of that equity.

The new grants will vest over four years, according to the report.

Twitter spent nearly $630 million on stock-based compensation in 2021.

It had more than 7,500 employees and now, the company is down to about 2,000 workers after Musk laid off thousands in several rounds of layoffs.

Despite Elon Musk’s efforts to monetize Twitter, the micro-blogging platform reported a massive 40 percent drop in revenue and adjusted earnings for December 2022.

Several advertisers “ditched the social-media platform following Elon Musk’s takeover”, the Wall Street Journal had earlier reported, citing people familiar with the matter.

In an update to investors, Twitter reported a 40 percent decline (year-over-year) in revenue and adjusted earnings for December 2022. The company recently made a first interest payment to banks that lent $13 billion to help Musk buy Twitter.

Musk had predicted in November that Twitter might go bankrupt.

[With Inputs from IANS]

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