Elon Musk values Twitter at $20 billion
SAN FRANCISCO — Elon Musk said Twitter is now worth about $20 billion, a significant drop from the $44 billion he was worth in the month, according to an email he sent to employees at the company on Friday October paid to buy the social network.
The email, read by The New York Times, was sent to employees to announce a new stock compensation program. In it, Mr Musk warned workers that Twitter remained in a precarious financial position and at one point was four months away from running out of money. He said “radical changes” at the company, including mass layoffs and cost cutting, are needed to avoid bankruptcy and streamline operations.
“Twitter is undergoing a rapid transformation,” Musk wrote, adding that the company can be thought of as “a reverse startup.”
Twitter’s value has declined as Mr. Musk fundamentally transformed the company. In October, Mr Musk privatized Twitter, meaning it is no longer required to be transparent about its finances. But the billionaire has publicly hinted that the company lost revenue as advertisers fled the platform following its acquisition and hinted that Twitter is at risk of bankruptcy.
The $20 billion figure values Twitter slightly higher than Snap, Snapchat’s parent company, which recently struggled with an advertising slump and predicted its revenue would fall. Snap, which has a market cap of about $18 billion, has about 375 million daily active users, compared to Twitter’s 237.8 million in the company’s final release before it went private.
Mr Musk did not respond to a request for comment and an email to Twitter’s communications department was bounced back with a poop emoji. The company’s new valuation was previously reported by The Information.
According to Mr. Musk’s email about the new stock compensation program, Twitter employees will receive shares in X Corporation, the holding company he used to buy the company. These awards are granted as part of the $20 billion valuation. Mr. Musk also said in the email that he believes Twitter could be worth $250 billion one day.
Twitter will plan to allow employees to sell the shares every six months, Mr Musk added, similar to the practice at SpaceX, its private rocket maker. Selling private stock would allow employees “to have liquid stock but without the stock price chaos and burden of lawsuits of a public company,” Musk wrote.