Twitter Loses its Value by More than 50%, Elon Musk Confirms
The social media giant Twitter has been making headlines since techpreneur Elon Musk took over. The company has been facing huge losses in recent times and a huge number of the workforce has been laid off. Now recently, according to an email, Elon Musk addressed the company’s staff and told them that Twitter is now only worth roughly $20 billion. The value of the social media behemoth is down significantly from the $44 billion he paid to purchase the social network in October of last year.
The email was sent to staff members to inform them of a new stock compensation program, as per a source. Furthermore, Mr. Musk warned staff that Twitter’s financial situation was still shaky and that the company was once just four months away from going bankrupt. He claimed that the business needed to undergo “radical adjustments,” such as cost-cutting and mass layoffs, in order to stay afloat and run more efficiently.
Why Twitter is losing its value?
Twitter is changing quickly, Mr. Musk remarked, adding that it may be compared to “an inverse start-up.”The value of Twitter has decreased as a result of Mr. Musk’s radical changes. Since Mr. Musk took Twitter private in October, it is no longer required to be transparent about its financial operations. Yet, the billionaire has stated publicly that Twitter was in danger of going bankrupt and that the company lost money when advertisers left the platform as a result of his takeover.
With a worth of $20 billion, Twitter is somewhat more valuable than Snap, the parent company of Snapchat, which has recently struggled with a decline in advertising and forecasted revenue declines. As of the company’s final public filing before going private, Snap had a market capitalization of roughly $18 billion and had about 375 million daily active users, compared to 237.8 million for Twitter.
A request for a response from Mr. Musk went unanswered, and an email sent to Twitter’s relations team was answered with a poop emoji. The Information first revealed the net worth of the corporation.
Twitter employees will get stock in X Corporation, the holding firm Mr. Musk created to purchase the company, according to his email announcing the new equity incentive program. The $20 billion valuation will apply to the rewards. In the email, Mr. Musk also expressed his opinion that Twitter may one day be worth $250 billion.
Mr. Musk noted that Twitter intends to follow the same procedure as his privately held rocket business SpaceX and permit employees to sell the stock every six months. Employees would have access to “liquid stock, but without the stock market turmoil and litigation constraints of a public firm,” according to Mr. Musk’s letter.
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