SAN FRANCISCO (AP) — Elon Musk said Twitter is now worth about $20 billion, according to an email he sent to company employees Friday, a significant drop from the $44 billion he paid to buy the social network in October.
The email, which was seen by The New York Times, was sent to employees to announce a new stock compensation program. In it, Musk warned workers that Twitter remained in a precarious financial position and, at one point, had been within four months of running out of money. He said “radical changes” at the company, including layoffs and cost cutting, were necessary to avoid bankruptcy and streamline operations.
“Twitter is rapidly reshaping itself,” Musk wrote, adding that the company could be thought of as “a reverse start-up.”
Twitter’s value has fallen as Musk has radically overhauled the company. In October, Musk made Twitter private, meaning he’s no longer required to provide transparency about his finances. But the billionaire publicly indicated that the company lost revenue when advertisers abandoned the platform after his takeover and suggested that Twitter was in danger of bankruptcy.
The $20 billion figure values Twitter slightly above Snap, Snapchat’s parent company, which has recently struggled with a slump in advertising and predicted its revenue would fall. Snap, which has a market capitalization of about $18 billion, has about 375 million daily active users, compared with 237.8 million for Twitter in the company’s final public disclosure before it went private.
Musk did not respond to a request for comment and an email was returned to Twitter’s communications department containing a poop emoji. The company’s new valuation was previously reported by Information.
According to Musk’s email about the new stock compensation program, Twitter employees will receive shares in X Corporation, the holding company he used to buy the company. Those prizes will be awarded under the valuation of $20 billion. Musk also said in the email that he believed Twitter could one day be worth $250 billion.
Twitter will plan to allow employees to sell the shares every six months, Musk added, similar to the practice at SpaceX, his private rocket maker. Private stock sales would allow employees to hold “liquid stock, but without the share price chaos and lawsuit burdens of a public company,” Musk wrote.
