Elon Musk has said that Twitter’s current value is $20 billion. This price is less than half of the $44 billion Musk paid for the social media platform just five months ago.
In an email sent to employees, it is mentioned that the San Francisco-based company has a new stock compensation program and the distribution of shares to employees of X Holdings, Twitter’s umbrella company.
The compensation plan has valued the social media platform at $20 billion. This is slightly more than that of Snap ($18.2 billion), the parent company of Snapchat and Pinterest ($18.7 billion). Unlike Twitter, they both are publicly traded.
In the internal email, the company’s CEO describes the brutal contraction in Twitter’s value. According to Musk, Twitter faced grave financial difficulties and it was even on the verge of bankruptcy at one point in time.
Musk, who is also the chief executive of Tesla Inc and aerospace group SpaceX, has said that Twitter will allow its employees to cash out shares every six months.
In an internal email, Musk described the brutal squeeze on Twitter’s value, saying, “Twitter faced such severe financial difficulties that at one point it was on the brink of an extreme financial crisis.
Earlier, in a message posted on Twitter on Saturday, Musk said, “Twitter expects to lose $3 billion per year.”
He cited a decline in revenue of $1.5 billion annually and a debt-service burden of the same amount. Musk, the majority shareholder of Twitter, said, “The situation of the company is very scary.”
Since taking control, Musk has reduced the group’s payroll from 7,500 employees to less than 2,000. He said in an email obtained by AFP that he saw a “clear but difficult path” to the $250 billion valuation.
(With inputs from agencies)
