Elon Musk, the CEO of Twitter, has proposed stock grants to the platform’s employees at a valuation close to $20 billion (approximately Rs. 1,64,600 crore), according to a report by the Information citing a source familiar with an email Musk sent to staff.
This valuation marks a significant decline, being less than half of the $44 billion (around Rs. 3,62,100 crore) Musk paid for Twitter, indicating a substantial drop in the platform’s worth.
A request for comment from Twitter did not receive an immediate response from the company.
Musk previously mentioned that Twitter is expected to reach a “roughly cash flow break-even” point in 2023, amidst reduced advertising spending by major clients following his acquisition of the platform.
This demand adds complexity to Musk’s strategy to restructure the unprofitable business he purchased in October for $44 billion. He has already cut over half of Twitter’s workforce, which numbered 7,500, including dismantling trust and safety teams in several locations, while looking for more affordable methods to oversee content.
The sweeping layoffs have raised concerns regarding Twitter’s ability to meet the requirements of the EU’s Digital Services Act, which mandates online platforms to implement specific measures against illegal content before the law’s full enforcement in early 2024.
To manage content moderation, Twitter has been increasingly relying on automation and has eliminated some manual oversight. Unlike larger competitor Meta Platforms, which operates Facebook and Instagram, Twitter does not currently employ fact-checkers.
© Thomson Reuters 2023
