Twitter’s valuation has been cut in half according to an internal memo from owner and CEO Elon Musk. File photo by John Angelillo/UPI | License Photo
March 26 (UPI) -- Twitter's valuation has been cut in half according to an internal memo from owner and CEO Elon Musk.
The memo sent by Musk and obtained by Platformer's Zoe Schiffer said that Musk is offering employees stock grants based on a $20 billion valuation about six months after purchasing the company for an estimated $44 billion.
As Musk neared closing a deal with Twitter last year he made several attempts to back off the purchase, citing Twitter failing to disclose information about bot accounts and its true user base. His attempts to renege on the purchase failed and he completed the purchase in October.
The tumult around Musk's ownership continued after the deal was completed, starting with the introduction of the controversial Twitter Blue paid verification plan. From publicly negotiating the price of the service with horror author Stephen King to launching, aborting and relaunching the service due to a slew of parody accounts, the feature has been fine tuned to protect official accounts but not without criticism.
The chaos surrounding Musk's takeover, which also included mass layoffs, coincided with a number of its biggest advertising leaving the app. According to Vox, Twitter has lost more than half of its 1,000 biggest advertisers since Musk purchased the company.
"Chief among their concerns is a perception that Musk has turned Twitter into a place where people can post racist, sexist, or otherwise harmful speech without much consequence. Major corporations don't want to jeopardize what they call "brand safety" by associating with offensive content," Shirin Ghaffary of Vox writes.
Stock grants are a benefit offered to employees, allowing them to buy a share of the company that may not be sold for cash until a set point in time, such as every six months for example.
According to the memo viewed by Schiffer, Musk said he sees a "clear but difficult path" to increase the value of the company, though he did not elaborate on what that path is. He has commented that he was "obviously overpaying" for Twitter when finalizing the purchase.