Twitter Inc (NYSE:TWTR) is worth less than half of the US$44bn Elon Musk bought it for in October, according to a memo offering staff a new stock compensation programme.
Staff were offered shares in Twitter’s holding firm X Corporation, with Musk basing the stock price off the social media’s US$20bn valuation, The Information first reported.
Musk has hinted towards Twitter’s struggles previously, suggesting it was losing up to US$4mln a day in November, while also cutting its original 8,000-strong workforce to just 2,000 or so since he took it private in October.
The halved valuation highlights the struggles, which have likely been worsened by advertisers fleeing the site since Musk took over, slashing daily revenue by as much as 40% as of January.
He added to staff that the firm had faced running out of money within four months and that “radical changes” were necessary, now likening the company to “an inverse start-up”.
Twitter employees will be able to sell their X Corporation shares every six months, Musk explained, leaving them with “liquid stock, but without the stock price chaos and lawsuit burdens of a public company”.