Despite the effort to make paid verification a success and claims of Twitter usage on the rise, Twitter’s value has declined after nearly six months of Elon Musk‘s ownership. The new social media CEO revealed that the company’s value has lost almost half its value since he took over back in October 2022.
Musk sent an email to employees last Friday, admitting that Twitter’s value dropped from the $44 billion that he paid to only $20 billion. The New York Times reported that Musk announced a “stock compensation program” and that “radical changes” are coming. This will include mass layoffs and other cost-cutting measures to ensure that Twitter doesn’t fall into bankruptcy.
“Twitter is being reshaped rapidly. An inverse start-up.”
It was revealed that Musk’s “stock compensation program” will work as follows: employees will receive stock in X Corporation, a bank co-founded by Elon Musk and used to buy the company. Employees will be allowed to sell the given stock every six months which would allow employees to have “liquid stock.”
“Twitter will plan to allow employees to sell the stock every six months, Mr. Musk added, akin to the practice at SpaceX, his privately held rocket manufacturer. The sales of private stock would allow employees to have “liquid stock, but without the stock price chaos and lawsuit burdens of a public company.”
Twitter has already undergone multiple cost-cutting measures since he took over the company in 2022. He laid off multiple employees, including a handful of executives, refused to pay rent, and allegedly broke San Francisco’s laws against installing beds in a registered commercial building. While these “drastic measures” might have helped the company stay afloat despite predictions of an early demise, it seems like things still aren’t sailing smoothly for the company.
Only time will tell if these measures will help the company make it to the end of 2023.