Billionaire Elon Musk's platform, X (formerly known as Twitter), has seen a substantial drop in its valuation over the past year. Musk had previously admitted to overpaying for Twitter when he purchased it for $44 billion, with $33.5 billion in equity. Now, the company's current valuation stands at $19 billion, marking a nearly 55% decrease from its acquisition price, according to the New York Times.
The recent stock awards documentation indicates that X will offer equity at a price of $45 per share, with employees having the opportunity to accumulate restricted stock units over time. Employees who received shares under the previous management will still receive cash payments amounting to $54.20 for those shares. It's unclear why the share price hasn't decreased by the same percentage as the company's overall worth.
In March of this year, Musk told X's employees that he believed the company was worth $20 billion and referred to it as an "inverse start-up."
Since Musk took over Twitter a year ago, he has implemented substantial changes to both the business and the social media platform. He initiated a global workforce reduction of about 7,500 employees and introduced alterations to content moderation policies. Additionally, he implemented a paid verification process. Despite being a significant revenue source, advertising experienced a notable decline, leading to negative cash flow and a substantial debt load in August 2023.
However, Musk remains optimistic about the company's growth strategy, envisioning its transformation into an "everything app." During a meeting celebrating the acquisition's first anniversary, Musk discussed this transformation, stating, "We're rapidly transforming the company from what it was, Twitter 1.0, into an everything app with an all-inclusive feature set where you can essentially do anything you want on our platform." He also mentioned the addition of new features, including a dating service, to the microblogging site.
Both Musk and the new owner and CEO, Linda Yaccarino, praised employees for their contributions to rebranding the company and launching new features. These include a revenue-sharing program for creators, video calls in direct messages, and improved live streaming quality, among others.
