Elon Musk bought the microblogging site for $44 billion in 2022.
Billionaire Elon Musk’s platform X, which was formerly known as Twitter, is now valued at less than half of what he purchased it for, a year ago. Mr Musk has earlier acknowledged that he had overpaid for Twitter, which he bought for $44 billion, including $33.5 billion in equity. Now, the current value of the company is at $19 billion, almost 55 per cent less than half of what he spent on the social media platform, as per the New York Times.
The documentation pertaining to the recent stock awards said that X would be providing the equity at a price of $45 per share, with employees able to accumulate restricted stock units over time. According to the company, employees who were issued shares under the previous management would still receive cash payments totalling $54.20 for those shares. However, it is unclear why the share price has not decreased by the same percentage as the company’s worth.
In March this year, Mr Musk told the employees at the company that he believed the company was worth $20 billion and labelled it “an inverse start-up.”
Since taking over Twitter a year ago, Mr Musk has completely redesigned both the business and the social media network. He laid off around 7,500 employees across the globe. Later, modified the content-moderation guidelines and introduced the paid verification procedure. Moreover, advertising, which is a major source of revenue for the company, saw a major drop which caused the cash flow to remain negative in August 2023 with a heavy debt load.
However, the billionaire remains optimistic towards the company’s growth strategy and transforming it into an “everything app”. In a meeting organised on the first anniversary of the acquisition, Mr Musk said, “We’re rapidly transforming the company from sort of what it was, Twitter 1.0, to the everything app with an all-inclusive feature app where you can basically do anything you want on our system. He also spoke about including new features to the microblogging site including dating service.
Although the new owner and CEO Linda Yaccarino were physically absent from the company headquarters, both showered praise on the employees for aiding with the rebranding of the company and launching new features including a revenue share program for the creators, video calls in direct messages and improved live streaming quality.