Twitter CEO Elon Musk is offering employees stock grants at a valuation of roughly $20 billion, nearly less than half of the $44 billion, reported The Wall Street Journal. The report refers to an email sent to employees by Musk.
“I see a clear, but difficult, path to a >$250B valuation,” Musk told employees in an email. He said that Twitter is being reshaped so that the company “can be thought of as an inverse startup.”
Twitter informed staff that it is providing additional equity grants to employees, which will begin to vest after six months, in a separate email, the report said. In about a year, the company will offer a liquidity event in which they can cash out some of that equity. The new grants will vest over four years, according to the Journal. In 2021, Twitter paid out around $630 million in stock-based compensation.
After Musk fired thousands of people over the course of numerous rounds of layoffs, the company, which once had more than 7,500 employees, is now down to approximately 2,000 employees. Twitter announced a staggering 40 per cent loss in revenue and adjusted profitability for December 2022 despite Elon Musk’s efforts to monetise the microblogging service.
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Several advertisers “ditched the social-media platform following Elon Musk’s takeover”, the Wall Street Journal reported.
The company recently made a first interest payment to banks that lent $13 billion to help Musk buy Twitter. Musk had predicted in November that Twitter may go bankrupt.
Following his takeover of Twitter, Musk said Twitter was losing $4 million every day. The billionaire took action to reduce staff size and fired approximately 70 per cent of employees in order to reduce costs. Advertising continues to be Twitter’s main source of income. Musk was able to entice some marketers back, though, by providing steep discounts. To support the revenue, he has also implemented subscription-based verification, the report said.