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It’s no secret that Elon Musk’s acquisition of Twitter has caused significant turmoil for the social media platform, with over 500 advertisers abandoning Twitter in response to Musk’s erratic changes. According to a report from The Information, Musk told his employees that the company is now worth just $20 billion, which is significantly lower than the $44 billion he paid last year. Musk shared this valuation in an internal Twitter memo, where he also announced a new stock compensation program that would allow employees to sell their stock every six months.
In the email, Musk warned employees that the company was still in a difficult financial position. However, at one point, Twitter was four months away from running out of cash, emphasizing the challenges that the company faces. Musk further described Twitter as an “inverse startup,” due to the significant changes he made to save the platform from bankruptcy.
Still a long way to go
This drop in valuation reflects the challenges Twitter has faced ever since Musk took over. Daily revenue has dropped by 40% compared to the previous year as over 500 of the company’s top advertising partners paused their spending on the platform following Elon’s decision to launch Blue with a verification subscription and the “general amnesty” policy, which brought some of Twitter’s worst users and a wave of fake accounts.
Despite the challenges, Musk remains optimistic about Twitter’s future. He sees a clear but difficult path to a $250 billion valuation, which would make the company’s current stock grants worth ten times as much in the future.
However, it remains to be seen whether Musk’s vision for Twitter will ultimately be successful. While the offer of stock grants may motivate employees and potentially increase the platform’s value, Twitter needs to address its challenges to be profitable.
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