Twitter is losing its value by more than 50%, confirms Elon Musk

The social media giant Twitter has been making headlines since techpreneur Elon Musk took over. The company has suffered huge losses in recent times and a large part of the staff has been laid off. Recently, according to an email, Elon Musk addressed company staff and told them that Twitter is now only worth about $20 billion. The value of the social media behemoth has dropped significantly from the $44 billion it paid last October to buy the social network.

The email was sent to employees to inform them of a new equity compensation program, a source said. In addition, Musk warned staff that Twitter’s financial situation is still shaky and that the company was just four months away from bankruptcy. He claimed the company had to undergo “radical adjustments” such as cost cutting and mass layoffs to stay afloat and operate more efficiently.

Why is Twitter losing its value?

Twitter is changing fast, Mr Musk noted, adding that it can be likened to “an inverted start-up”. Twitter’s value has declined due to Mr. Musk’s radical changes. Since Mr. Musk took Twitter private in October, it no longer needs to be transparent about its financial operations. Still, the billionaire has publicly stated that Twitter was facing bankruptcy and that the company was losing money as advertisers left the platform as a result of his acquisition.

Valued at $20 billion, Twitter is slightly more valuable than Snap, Snapchat’s parent company, which recently struggled with ad decline and predicted revenue declines. As of the company’s last public filing before going private, Snap had a market cap of about $18 billion and had about 375 million daily active users, compared to Twitter’s 237.8 million.

A request for a response from Mr Musk went unanswered and an email sent to Twitter’s relations team was answered with a poop emoji. The information first revealed the net worth of the company.

Twitter employees will receive shares in X Corporation, the holding company Mr. Musk set up to buy the company, according to his email announcing the new stock stimulus program. The $20 billion valuation applies to the rewards. In the email, Mr. Musk also expressed his view that Twitter could one day be worth $250 billion.

Mr Musk noted that Twitter intends to follow the same procedure as his private rocket company SpaceX and allow employees to sell the shares every six months. Employees would have access to “liquid stocks, but without the stock market turmoil and legal constraints of a public company,” Mr Musk’s letter said.

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