Twitter, the social media giant that has been struggling to grow its user base and revenue for years, has been valued at a fraction of what it was worth when it was acquired by Elon Musk, the billionaire entrepreneur and visionary behind Tesla and SpaceX. According to the New York Times, Musk revealed in a memo to his employees that he now estimates Twitter’s value at only $20 billion, less than half of the $44.9 billion he paid for it.
Musk also mentions that the company was on the verge of bankruptcy when he took over. In his memo, Elon says that the “radical changes” he’s made since taking over the company were necessary to save money.
The internal memo was sent out to the employees to explain their stock compensation package. Twitter employees will receive stock grants for the holding company, the X Corporation, which he used to purchase Twitter which will now operate under the current $20 billion estimate.
However, Musk seemed optimistic about the future in his memo as he believes the company will be worth “$250 billion” someday.
Musk’s offer to employees comes as Twitter faces increasing competition from rival social networks such as Facebook, TikTok, and Clubhouse, as well as regulatory scrutiny from governments around the world over its content moderation policies and data privacy practices.
Musk’s valuation of Twitter at $20 billion is based on the company’s current share price of $25.40, which is down more than 50% from its peak of $54.20 when he announced his bid for the company. At that time, Musk had a 9.2% stake in Twitter, which he acquired through a series of transactions in the stock market. Stay tuned to Thirsty For News as we bring you similar stories.
What do you think of Musk’s latest valuation of Twitter? Are you excited or worried about the future of the platform? Let us know in the comments.