According to an email sent by Elon Musk on Friday to the company’s employees, Twitter’s valuation has dropped from $44 billion to $20 billion. In comparison to the amount he paid to acquire the company in October of last year, this is a significant reduction.
An email sent to announce a new stock compensation program was reviewed by the New York Times. With only four months left of operating costs, Musk warned employees Twitter’s financial situation was still unstable. The company was perilously close to running out of funds at one point.
To prevent bankruptcy and streamline operations, he suggested drastic measures, including layoffs and cost-cutting.
According to Elon Musk, Twitter is currently undergoing a rapid transformation, and he believes that it could be viewed as an “inverse start-up.”
As a result of Musk’s substantial restructuring of Twitter, the company’s value has declined significantly. Musk privatized Twitter in October, releasing it from public disclosure obligations. Following Twitter’s takeover, the billionaire has publicly indicated that the platform has lost revenue due to advertisers leaving the platform, and he has warned that Twitter might go bankrupt.
Snapchat VS Twitter:
Despite the advertising slump and a decrease in revenue, Twitter’s $20 billion valuation is slightly higher than Snap’s $20 billion valuation. According to Snap, its market capitalization is approximately $18 billion, while Twitter’s last public disclosure reported 237.8 million daily active users.