According to an internal communication published by US news media, Elon Musk has informed the public that Twitter is now worth $20 billion, less than half the $44 billion he spent on the social media platform just five months earlier.
The email to employees referred to a new stock compensation program in the San Francisco-based company and the allocation of shares to employees of X Holdings, Twitter’s umbrella company since Musk purchased it in late October.
The compensation plan values the platform at $20 billion, slightly more than Snapchat’s parent company Snap ($18.2 billion) or Pinterest ($18.7 billion), both of which are publicly traded, unlike Twitter.
Musk, who is also the chief executive of Tesla Inc. and aerospace group SpaceX, said that Twitter would allow its employees to cash in shares every six months.
An automatic response in the form of a poop emoji was generated in response to an email from AFP to Twitter’s communications team.
Musk outlines the dramatic decline in Twitter’s valuation in a confidential email. He claims that the platform had severe financial issues to the point where it was almost insolvent at one point.
“Twitter was trending to lose ~$3B/year,” Musk said in a message posted Saturday on the platform.
He cited a revenue drop of $1.5 billion a year and a debt-servicing burden of the same amount — leaving it with “only 4 months of money.”
Musk, Twitter’s majority shareholder, added simply: “Extremely dire situation.”
But he then said that “It looks like we will break even” in the second quarter of the year, with advertisers — many of whom fled the platform after the mercurial billionaire bought it — now beginning to return.
Since taking control, Musk has sharply cut the group’s payroll from 7,500 employees to fewer than 2,000.
He said in the email that he sees a “clear but difficult path” to a valuation of $250 billion, without specifying how long that might take.
Yet in yet another setback for the business, bits of Twitter’s source code were made public on the GitHub development platform, the latter revealed to AFP on Sunday, corroborating a New York Times article.
Twitter requested that GitHub delete the files from its website, however due to their limited exposure, hackers may have been able to find bugs in Twitter’s original program.