The $20 billion valuation was announced by Twitter CEO Musk in an internal memo, where he also announced stock grants at the same valuation
Twitter CEO Elon Musk just wrote an internal memo to his staff, where he valued the social media company to be worth around $20 billion, a significant decrease to Musk’s Twitter buyout payment, which valued the company at $44 billion.
Apart from announcing the $20 billion valuation, Musk in his memo, also announced stock grants to employees, which were reportedly calculated at the same $20 billion valuation.
Pointing to a double decrease in value, the $20 billion valuation came as a shock to both Twitter employees and users. Especially at a time where the CEO claims to have brought back the company to a much more stable state, pushing it on track to its cash flow break-even in 2023.
The micro-blogging social media company has been able to push its cash flow to the positive side by drastically reducing costs and creating quicker ways of generating income.
Right after stepping into the company, CEO Elon Musk cut costs by slashing down more than 50% of its total workforce, with job slashes and new layoff rounds continuing into 2023.
This mass layoff helped the company to retain costs and shutdown numerous offices that were taking up a large part of the company’s expenses.
Apart from laying off employees, Musk also introduced newer ways for the company to earn revenue, which includes the introduction of a paid Twitter blue tick and the revival of political advertisement on the platform.
Responding to massive layoffs in its team of moderators, the European Union contacted Musk to hire more human moderators. Now this is something that Musk doesn’t want with Twitter, since following this decision will drastically increase costs for the platform whereas Musk wants to automate Twitter’s content regulation process.