Since the boisterous takeover of Twitter by Elon Musk five months ago, the social media giant’s valuation has plummeted by more than 50 percent, according to an internal email obtained by American news media outlets.
The email was supposedly sent to employees and contained information regarding a new stock compensation scheme rolled out by the San-Francisco-based tech organization and stock options for employees in X holdings – Twitter’s holding company since October when Musk completed the purchase.
The compensation program estimated Twitter’s valuation at 20 billion dollars, somewhat more than Snapchat’s umbrella company Snap, which is valued at 18.2 billion dollars, or that of social media website Pinterest, which’s worth 18.7 billion dollars, a couple of publicly traded companies, unlike Twitter.
Musk juxtaposed the brutal collapse of Twitter’s valuation with its past success in the email while informing readers that the social media colossus was once on the brink of bankruptcy due to grave financial problems.
“Twitter was trending to lose 3 billion dollars a year,” Musk stated in a message posted on Twitter last week while describing the situation as ‘extremely dire.’ He pointed towards a 1.5 billion dollar per year fall in revenue and a debt burden of the same amount, leaving the company with just 4 months of reserves.
However, Musk also stated that all is not doom and gloom as many advertisers, who were the main revenue sources of Twitter, are returning to the platform after a mass exodus that took place after Musk’s purchase. Therefore, Musk expects Twitter to “break even” in the second quarter of the year.
(Information sourced from NDTV)