Latest Twitter Valuation: $20B
Elon Musk’s Twitter Takeover: A $24 Billion Loss and Hope for a $250 Billion Future
Elon Musk’s Twitter acquisition has been far from smooth sailing. The entrepreneur’s controversial purchase of the microblogging platform in October for $44 billion was met with skepticism, as many analysts believed the platform was overvalued. Five months later, Musk has now valued Twitter at just $20 billion, according to reports from Platformer and The Information.
From $44 Billion to $20 Billion: A Turbulent Journey; Potential Bargain for Employees
Although the new $20 billion valuation is significantly lower than the initial purchase price, this could present a potential opportunity for Twitter employees. Stock options at a lower valuation could be an attractive prospect for talent, particularly if the company’s valuation increases in the future.
Musk’s $250 Billion Vision for Twitter
Despite the platform’s challenges, Elon Musk remains optimistic about Twitter’s future. In an email sent to employees, he outlined a “clear, but difficult” path to a valuation of over $250 billion. This bold prediction implies that new shares could be worth ten times their current value in the future.
Musk’s Controversial Decisions
Musk’s time at the helm of Twitter has seen several controversial decisions. One of the most notable was his move to remove safeguards against misinformation, racism, anti-Semitism, and hate speech, positioning Twitter as a platform for conservative voices. This decision led to a significant loss of advertising revenue, which accounted for over 91% of the platform’s revenue in Q2 2022.
Massive Job Cuts
In an effort to cut costs, Musk also oversaw the departure of 5,200 employees in just three months, amounting to almost 50% of the workforce. Following these layoffs, he demanded that remaining employees commit to working long hours or leave the company.
Compensation and Liquidity Events
For the remaining employees, compensation has become a key issue. In his email to staff, Musk stated that new grants would vest over four years and cash-out opportunities would be offered. Employees would be able to sell their stock holdings every six months during “liquidity events,” based on third-party valuations.
An “Inverse Startup”
In his email, Musk urged employees to view Twitter as an “inverse startup,” insisting that radical changes were necessary to avoid bankruptcy. He also tweeted that the company might become profitable by the second quarter as advertisers return, stating, “Now that advertisers are returning, it looks like we will break even in Q2.”
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