Nuked Hey followers, it’s Nuked here! Today I’m here to talk to you about something that has been making headlines lately – Elon Musk’s reported halving of Twitter’s valuation in an internal memo.
According to Platformer and The Information, Musk has put a value of $20 billion on Twitter, which is less than half of the $44 billion he paid to acquire the site. A memo sent to staff viewed by Platformer’s Zoë Schiffer reportedly says that employees will receive stock grants based on this $20 billion valuation.
It was last year when Musk stated that he was “obviously overpaying” for Twitter at $54.20 per share. Price was also one of the reasons why he attempted to back out of the deal, claiming that the company made false and misleading statements about the presence of bots on the platform.
Musk adds that he sees “a clear but difficult path” to achieving a $250 billion valuation, which would eventually make Twitter’s current stock grants worth 10 times as much as they are now. Like his other company SpaceX, Twitter will also reportedly let employees cash in their stock grants at specified periods.
Musk views Twitter as an “inverse startup” due to the changes he made to save it from bankruptcy. The new $20 billion estimate likely reflects the challenges that emerged due to some of these radical changes, such as the new Blue with verification subscription that led to a wave of fake accounts and a “general amnesty” policy that brought back some of Twitter’s worst users.
Twitter has lost some of its biggest advertisers due to these changes, with a recent report from Vox indicating that over half of the top 1,000 advertisers on Twitter prior to Musk’s acquisition no longer show ads on the platform. This has obviously not helped the company sort out some of its financial issues, including its mountain of debt and several unpaid bills owed to landlords, an advisory firm, a private jet company, and many others.
Fidelity also slashed its stake in the company from $53.47 million to $23.46 million last year, while Twitter’s revenue dipped by about 40 percent year over year in December.
It will be interesting to see how things pan out for Twitter in the near future. Personally, I’m rooting for them – what about you?
