Musk's leaked memo suggests Twitter's value less than half of what he paid

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According to the calculation on a leaked memo of billionaire Elon Musk, the worth of Twitter is less than half of what he spent to buy it six months ago, reflecting that Musk faced a loss of more than $20 billion (£16.4 billion) in value.

In the memo, Musk suggested to the staff of the social media company that it is now valued at less than $20 billion. Comparing this with the hefty amount of $44 billion with which he bought the company in October 2022 clearly shows the loss he is facing.

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The steep devaluation of the company follows the turbulent takeover by Musk. The platform was left by various large advertisers. Investment firm Fidelity which worked as a major source of funds for Musk in purchasing the company has written down its stake's value by 56 per cent.

The measure of Twitter's worth was based on the offer of Musk stock grants, as per the Platformer and the Information which was the first one to report about the memo.

Stock grants, which are normally used as a way to incentivise employees, are an opportunity to purchase shares that cannot be sold till a set point in time, as opposed to the stock options, which – on the basis of the applied conditions – can remain flexible.

It is aimed at encouraging staff to meet a set valuation by a given point in time so that the shares for cash can be sold. The stock grants can be “sold every six months, based on a third party valuation”, read another internal email sent to Twitter staff.

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An email from Musk said that before many acrimonious, high-profile layoffs the company was running out of money for four months.

In the latest memo, Musk told staff, “I see a clear, but difficult, path to a >$250B valuation,” which would reflect a tenfold increase in share value. 

(With inputs from agencies)

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