Last year, Elon Musk purchased Twitter for $44 billion, and now, renamed as “X”, its value has decreased by 55% to $19 billion. This new valuation was confirmed when, on Monday this week, employees at X were awarded equity in the company at a valuation of $19 billion, or $45 per share.
In the documentation for the fresh equity grants, X mentioned that the shares would be provided at $45 each as restricted stock units, which employees can accrue over a period. The company stated that employees would receive a cash payment of $54.20 for any shares previously awarded to them under the former management.
It’s uncertain why the stock price hasn’t decreased proportionally with the company’s valuation, but X might have changed the number of available shares.
Since assuming control of Twitter, Elon Musk has expressed his desire to shape the company’s compensation structure similar to SpaceX. While also being privately owned, SpaceX allows its employees to frequently sell a segment of their shares to external investors.
In the year since Mr. Musk took over Twitter, he has significantly transformed both the company and the platform. Over 80% of its 7,500 workforce have either resigned or been dismissed. He revamped the platform’s verification procedure and content moderation guidelines. The primary revenue source, advertising, plummeted by nearly 60% this summer in the U.S. Additionally, Mr. Musk saddled the company with billions in debt to finance the purchase.
He has been trying to address the revenue issue by introducing new subscription plans. Last week he introduced two new subscriptions – Premium+ at $16 per month and Basic at $3 per month – in an attempt to boost its revenue. These two new subscriptions are in addition to the current $8/month subscription service.
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