Based on a leaked memo from Elon Musk, Twitter has lost over $20 billion in value in the past six months, which means its worth is now less than half of what he originally paid for it.
In a memo to Twitter’s employees, Musk indicated that the company’s current value is below $20 billion, which is a significant drop from the $44 billion he paid for it back in October 2022.
After Elon Musk’s tumultuous takeover of the company, Twitter has suffered a significant devaluation, with several major advertisers departing from the platform. Additionally, Fidelity, which was a significant source of funding for Musk’s acquisition, has reduced the value of its stake by 56%.
According to reports from the Information and Platformer, which were the first to reveal the memo, the valuation of Twitter was determined by Musk’s offer of stock grants.
The stock grants could be “sold every six months, based on a third party valuation”, another separate internal email to Twitter staff said.
In his email, Musk also mentioned that prior to a series of contentious high-profile layoffs, the company was approximately four months away from exhausting its funds.
Elon Musk provided figures in December indicating that Twitter’s workforce had been reduced from approximately 7,500 to about 2,000 employees.
In his recent memo, Musk stated that he sees a challenging yet attainable path to a valuation exceeding $250 billion, which would suggest a tenfold rise in the company’s share value.
The proposed model would be comparable to the one utilized by Musk’s other company, SpaceX, where employees have the option to sell their shares back to the company.
While this can be a profitable incentive if the company’s value experiences a significant increase, it lacks the flexibility of selling a publicly listed stock.
