Elon Musk has sent an email to Twitter employees stating that the social media company is now worth around $20 billion, which is a significant drop from the $44 billion he paid to acquire it in October. The email was sent to announce a new stock compensation program, and in it, Musk warned workers that Twitter remained in a precarious financial position and had been close to running out of money just four months ago. Musk added that “radical changes” at the company, including cost-cutting and mass layoffs, were necessary to streamline operations and avoid bankruptcy, The New York Times reported after viewing the email.
Since Musk’s takeover, Twitter’s value has declined, and the billionaire has indicated publicly that the company lost revenue as advertisers fled the platform. This announcement from Elon Musk is significant because he had taken Twitter private in October, which means that it is no longer obligated to provide transparency about its finances. However, he has stated that the company could be in danger of bankruptcy.
Musk was explaining the new stock compensation package for Twitter employees when he sent the email, and they will now receive stock grants for the holding company he used to buy Twitter, which will operate under the current $20 billion estimate. Workers will then be able to sell and cash in on their privately held stock every six months.
Twitter’s headcount has been cut from about 7,500 to about 2,000 employees since Musk took over in December. In his latest memo, he told staff that he sees a clear but difficult path to a valuation of over $250 billion, which would imply a tenfold increase in share value. It remains to be seen whether Musk’s strategy to turn Twitter around will be successful, but his comments show that he is committed to the company and believes in its potential.
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