(MENAFN) According to an internal email seen by American news media, Elon Musk has valued Twitter at USD20 billion, less than half of the USD44 billion he paid for the social media platform just five months ago. The email to employees dealt with a new stock compensation program, which attributes to employees of stock in X Holdings, Twitter's umbrella company since Musk purchased it in late October. The compensation plan values the platform at USD20 billion, slightly more than that of Snap or of social network and creative website Pinterest, both of which are publicly traded.
In the internal email, Musk describes the brutal contraction in Twitter's value. He says the platform faced such grave financial difficulties that at one point, it was on the verge of bankruptcy. Musk cited a revenue drop of USD1.5 billion a year and a debt-servicing burden of the same amount -- leaving it with "only 4 months of money." He added that Twitter was trending to lose around USD3 billion per year, calling it an "extremely dire situation."
However, Musk then stated that with advertisers now beginning to return, "It looks like we will break even" in the second quarter of the year. Since taking control, Musk has sharply trimmed the group's payroll, from 7,500 to fewer than 2,000 employees. He said in the email that he sees a "clear but difficult path" to a valuation of USD250 billion, without saying how long that might take.
Musk, who is also the chief executive of Tesla Inc. and aerospace group SpaceX, is Twitter's majority shareholder. He added that Twitter would allow employees of the social network to cash in shares every six months. This new stock compensation program aims to incentivize employees and boost morale during a challenging period for the company.
The news of Twitter's declining value and financial difficulties comes as a surprise, as the platform has been growing in popularity and influence in recent years. Musk's purchase of the platform in October 2021 was seen as a bold move, as he had previously been critical of the platform and its policies. However, with Musk's leadership and strategic changes, Twitter may yet see a resurgence in value and profitability.
MENAFN28032023000045014228ID1105878687
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.