Elon Musk has valued Twitter at $20 billion, which is less than half of the $44 billion he paid to acquire the social media platform. According to reports from Platformer and The Information, Musk informed his staff that they would receive stock grants based on Twitter’s current valuation.
This latest move by Musk comes after he admitted last year that he was “obviously overpaying” for Twitter at $54.20 per share. The price was also a factor in his attempts to back out of the deal, as he claimed that the company had made false and misleading statements about the presence of bots on the platform.
Despite these challenges, Musk reportedly sees a “clear but difficult path” to achieving a $250 billion valuation for Twitter. He believes that this would make the company’s current stock grants worth ten times as much as they are now. Just like his SpaceX venture, Musk plans to allow Twitter employees to cash in their stock grants at specified periods.
However, some analysts believe that Musk’s $20 billion estimate reflects the difficulties that Twitter has faced since he made “necessary” changes to the platform to save it from bankruptcy. For example, the new Blue with verification subscription led to a wave of fake accounts, and the “general amnesty” policy brought back some of Twitter’s worst users.
These changes have also caused some of Twitter’s biggest advertisers to leave the platform. A recent report revealed 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 not helped the company’s financial issues, which include a mountain of debt and several unpaid bills owed to landlords, advisory firms, and private jet companies.
Despite these challenges, Musk remains optimistic about the future of Twitter. He sees the platform as an “inverse startup” and believes that the changes he made will eventually lead to a $250 billion valuation. Only time will tell if his prediction comes true, but one thing is for sure: Elon Musk is not afraid to take risks and make bold moves in the world of business.
