A leaked memo from Twitter CEO Elon Musk has revealed that the company’s value has fallen by over $20 billion, less than half of the $44 billion Musk paid for it six months ago.
The Guardian reports that a leaked memo from Twitter CEO Elon Musk reveals that the company’s valuation has fallen by more than $20 billion, leaving it worth less than half of the $44 billion that Elon Musk paid for it just six months ago.
Elon Musk’s Halloween costume (Taylor Hill /Getty)
The memo, which was sent to Twitter employees, reveals that the social media juggernaut is now only worth around $20 billion. The sharp devaluation comes after a turbulent time following Musk’s takeover, during which a number of significant advertisers left the platform. Fidelity, the investment company that provided a significant portion of the funding for Musk’s acquisition, has also written down the value of its stake in the business by 56 percent.
According to Platformer and the Information, which published the memo first, the valuation of Twitter was established using Musk’s offer of stock grants. Employees who receive stock grants generally get the chance to purchase shares that they can’t sell until after a certain period of time. This contrasts with stock options, which may provide more flexibility depending on the terms. The intention is to motivate staff to work toward a predetermined valuation by a specific date so they can sell their shares for cash.
The stock grants may be “sold every six months, based on a third-party valuation,” according to another internal email sent to Twitter staff. The memo also revealed that the business was just four months away from going bankrupt before a string of well-publicized layoffs. According to Musk’s December statistics, as a result of these layoffs, Twitter’s staff has decreased from about 7,500 to 2,000 people. That headcount was further reduced when the company laid off more employees, including hardcore Musk loyalists.
Read more at the Guardian here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship. Follow him on Twitter @LucasNolan