Elon Musk said Twitter is now worth about $20 billion, a significant decline from the $44 billion he paid to buy the social network in October, according to an email sent to company employees on Friday.
The email, which was seen by The New York Times, was sent to employees to announce a new stock compensation program. In it, Mr Musk warned workers that Twitter remained in a precarious financial position and, at one point, was four months away from running out of money.
He said “radical changes” were necessary at the company, including massive layoffs and cost-cutting, to avoid bankruptcy and streamline operations. Twitter is being rapidly reinvented, Mr Musk wrote, adding that the company could be considered a reverse start-up.
Twitter’s value has plummeted as Mr Musk dramatically overhauled the company. In October, Mr Musk took Twitter private, meaning it is no longer obliged to provide transparency about its finances. But the billionaire has publicly indicated that the company suffered a loss of revenue as advertisers abandoned the platform following its acquisition, and suggested Twitter is at risk of bankruptcy.
The $20 billion figure is slightly higher than Twitter, Snapchat’s parent company Snap, which recently grappled with an advertising slump and predicted its revenue would fall. Snap, which has a market capitalization of about $18 billion, has about 375 million daily active users, compared with Twitter’s 237.8 million at the company’s last public disclosure before going private.
Mr Musk did not respond to a request for comment and an email to Twitter’s communications department was returned with a poop emoji. The new valuation of the company was earlier reported by The Information.
According to emails from Mr Musk about the new stock compensation program, Twitter employees will receive stock in X Corporation, the holding company that bought the company. These awards will be given at a value of less than $20 billion. Mr. Musk also said in the email that he believes Twitter could be worth $250 billion someday.
Twitter will allow employees to sell stock every six months, Mr Musk said, similar to the practice at his privately held rocket maker SpaceX. The private stock sale would allow employees “to hold liquid stock, but without the stock price chaos and burden of public company litigation,” Mr Musk wrote.