Leaked Musk Email Puts Twitter Valuation At $20 Billion
Elon Musk bought Twitter amidst an overhyped social media frenzy last year for $44 billion, but the company's value has now dropped to less than half of what Musk paid for it. According to a report from The Information, Musk recently doled out stock grants to employees which valued Twitter at roughly $20 billion. Citing internal communication, The Wall Street Journal also reports that the employee stock awards are based on putting the company's net worth at approximately $20 billion.
When Musk originally signed the contract under the looming specter of a messy legal battle, multiple market watchers and analysts remarked that the Tesla CEO has vastly overpaid for it. Twitter hasn't really had a profitable run in years, and turning its fortunes over was never going to be an easy task. On top of it, high-level exits and massive layoffs, complemented by aggressive internal restructuring and a botched Twitter Blue launch, haven't really set the cash registers ringing. The $20 billion valuation sounds alarmingly low, yet not entirely unexpected, since Musk himself has previously flagged bankruptcy fears for the platform.
The road to redemption is rough
The Twitter CEO, who currently runs the company as some sort of inverse startup with a controversial hardcore performance approach, has some ambitious plans. Musk has reportedly told Twitter employees that he can "see a clear, but difficult, path to a >$250B valuation," which would mean the employee stock awards would essentially get more than a 10-fold jump if that goal is realized. But achieving those lofty financial goals won't exactly be easy. Twitter's advertiser exodus is well-known, and all those dreams of turning it into the go-to spot for creators is a far-fetched dream, too.
But the situation doesn't appear to have improved ever since Musk got desperately irked about the whole situation and went beefing with Apple. According to a Vox report, more than half of Twitter's top 1,000 advertisers before the purchase ceased putting ads on the platform as of February 2023, and they're not particularly inclined about making a return. Plus, Musk also had high hopes for the Twitter Blue subscription service, but that hasn't turned out like a fairytale, either. Data compiled by Sensor Tower and shared with TechCrunch reveals that in the three months since its launch, Twitter Blue has only collected $11 million from mobile sign-ups.