Twitter Chief Elon Musk has offered the virtual entertainment organization’s workers stock awards at a valuation of almost $20 billion, The price is half of what he paid to acquire Twitter. Musk paid $44 billion to acquire the microblogging site in October of last year. The report stated that it was an acknowledgement of how much Twitter’s value has decreased since the deal, but that it is still significantly higher than Twitter’s rivals’ public market valuations.
In December of last year, Elon Musk stated that, as a result of major advertisers reducing their spending on the social media platform following his takeover, Twitter was on track to be roughly cash flow break-even in 2023.
According to the report, Musk has predicted that Twitter will generate less than $3 billion in revenue this year, and the company’s $13 billion debt makes the $20 billion valuation an 11-time multiple of this year’s revenue, resulting in an implied enterprise value of $33 billion.
Subsequent to assuming control over Twitter, Musk had said his organization was losing $4 million per day. The billionaire made the move to reduce the number of employees and fired nearly 75% of them to cut costs. Unfortunately, there is no choice regarding Twitter’s reduction in force when the company is losing over $4 million per day.
A research company reported in January of this year that Twitter advertising spending had decreased by 71% in December. Following Musk’s takeover, prominent advertisers decreased their spending on the social media platform, resulting in the decline. In comparison to the same month last year, Twitter ad spending decreased by 55% in November. According to a different report, Twitter’s revenue decreased by 40% year-over-year.