Elon Musk took over Twitter in October 2022 for $44 billion USD (about $60.2 billion CAD). Five months in, and the company’s valuation has dropped by more than 50 percent.
In a recent memo sent to staff, which was viewed by Platformer’s Zoë Schiffer, via The Verge, Musk said that Twitter is valued at $20 billion USD (about $27.4 billion CAD) and that employees would receive stock grants based on that valuation.
Comp increases will be based on X Corp stock. Current grants are based on a $20b valuation. Musk says he sees a “clear but difficult path” to $250 billion valuation which would mean current grants could 10x. 3/
— Zoë Schiffer (@ZoeSchiffer) March 25, 2023
Musk believes that Twitter could one day reach a $250 billion USD (about $342.1 billion CAD) valuation. He says that reaching that valuation is a “clear but difficult path,” which would make the current employee stock grants worth ten times as much as they are now. Musk also views Twitter as an “inverse startup” due to the significant changes he made to the platform to save it from bankruptcy. However, the changes introduced, such as the new Blue with verification subscription and Twitter’s “general amnesty” policy that brought back some of Twitter’s worst users, have caused challenges for the social media company. Twitter has lost some of its biggest advertisers, and its revenue dipped by about 40 percent year over year in December.
Last year, Musk stated that he was overpaying for Twitter at $54.20 per share, and attempted to back out of the deal, claiming that the company made false and misleading statements about the presence of bots on the platform. Constant legal pressure from Twitter meant that Musk had to abide by his initial acquisition offer, and ended up taking over the social media company for $44 billion. Only time will tell whether Musk’s ambitious plans for Twitter will pay off in the long run.
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Source: Platformer’s Zoë Schifferesla, Via: The Verge