Elon Musk's Stock Grant Offer to Employees Values Twitter at Approximately $20 Billion

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According to an email seen by The Wall Street Journal, Elon Musk announced that Twitter employees will receive stock awards based on a valuation of approximately $20 billion, which is less than half of the $44 billion he acquired the company for last year.

Despite this, Musk expressed optimism about the company's future, stating that he sees a clear but difficult path to a valuation of over $250 billion, which would make the current stock grants worth 10 times more. In the email, Musk also remarked that Twitter is being reshaped at a rapid pace, and radical changes have been necessary to prevent the company from going bankrupt.

The lower valuation figure is a reflection of the challenges Twitter has faced since Musk's takeover, with many big advertisers withdrawing from the platform, putting pressure on the company's primary revenue source.

Fidelity, a co-investor that supported Elon Musk's purchase of Twitter, wrote down its stake in the company by 56% in November, according to public filings. In a separate email seen by the Wall Street Journal, Twitter announced it would offer new equity grants to staff that would begin vesting after six months.

The grants would be in addition to any legacy Twitter equity and would vest over four years. Twitter is planning a liquidity event for employees to cash out some of their equity about a year from now. Twitter spent nearly $630 million on stock-based compensation in 2021 and had over 7,500 full-time employees.