Twitter Was Dangerously Close to Running Out of Money: Elon Musk

Twitter’s valuation has dropped from $44 billion to $20 billion recently, said an email sent by Elon Musk to the company’s employees on Friday. This is a significant drop from the amount he paid to acquire the company back in October last year.

The New York Times reviewed the email, which was sent to announce a new stock compensation program. Musk cautioned the workers that Twitter’s financial situation was still unstable and that the company had been perilously close to running out of funds at one point, with only four months of operating costs left.

He stated that drastic measures, such as significant layoffs and cost-cutting, were necessary to prevent bankruptcy and streamline operations.

According to Elon Musk, Twitter is currently undergoing a rapid transformation, and he believes that it could be viewed as an “inverse start-up.”

Since Musk’s substantial restructuring of the company, Twitter’s worth has diminished considerably. In October, Musk privatized Twitter, releasing it from its obligation to publicly disclose its financial information. However, the billionaire has publicly suggested that the company experienced a loss in revenue due to advertisers leaving the platform following his takeover, and he has warned of the possibility of bankruptcy for Twitter.

Barely Beating Snapchat

The $20 billion evaluation of Twitter slightly surpasses Snap, the parent company of Snapchat, which has experienced difficulties due to an advertising slump and a decrease in revenue. With a market capitalization of approximately $18 billion, Snap currently has about 375 million daily active users, in comparison to Twitter’s 237.8 million reported in its last public disclosure prior to going private.

When contacted for comment, Musk did not respond. An email to Twitter’s communications department was returned with a poop emoji. The Information initially reported the social network’s new valuation.

Twitter Could be Worth $250 Billion

As per Mr. Musk’s email regarding the latest stock compensation program, Twitter staff members will obtain stocks in X Corporation, the holding company he utilized to acquire the social network. These awards will be granted based on the current $20 billion valuation. In addition, Mr. Musk expressed his belief in the email that Twitter has the potential to reach a worth of $250 billion at some point in the future.

Mr. Musk went on to state in the email that Twitter intends to allow personnel to sell their stocks every six months, similar to the policy at SpaceX, his privately owned rocket manufacturer.

The sale of private stocks would enable employees to possess “liquid stock, but without the stock price chaos and lawsuit burdens of a public company,” according to Musk’s message.

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