- Twitter has launched a new incentive scheme for its employees, based on a company valuation of $20 billion, according to internal communications.
- This is less than 50 percent of the $44 billion the company was valued at when it was acquired by Elon Musk.
- Despite this, Twitter’s CEO believes the company could increase its value tenfold to $250 billion if it does a good job.
Twitter launched an incentive project for its employees that takes as a reference a company valuation of 20 billion dollars (18.5 billion euros), according to an internal statement accessed by specialized media in the United States.
This figure does not even reach 50 percent of the 44 billion that the company was valued at when it was acquired by billionaire Elon Musk.
Musk bought Twitter for a price that exceeded the real value of the company, due to the control premium he offered in the purchase and because market conditions had undergone sudden changes, with a very sharp decline in digital advertising revenues.
To this was added the complex scenario in the arrival of the South African billionaire, who dismissed 50 percent of the workforce of 7,500 workers and the resignations of hundreds of others.
Advertisers “fled” (literally speaking) in the face of the growing wave of hate messages and the changes in content moderation policies.
In addition, a significant number of people in the commercial divisions were laid off.
Twitter’s real value
The company, in addition, must deal with a high debt that Musk accepted as part of the purchase and that not only carries a high interest burden, but, at equal asset value, directly implies a lower value of the shares.
The 20 billion valuation is not rigorously a market value, but it is aligned with the value correction applied at the end of 2022 by the asset management firm Fidelity, which holds shares in the company.
However, Twitter’s CEO assures that the company has the opportunity to increase its value by up to ten times if they do a good job and reach $250 billion.
The company continues to implement the modifications that Musk put in place, among which stands out the boost to the subscription plan that means that the blue verified brand will be paid.
After a transition period where the platform kept the verified mark for users who had it with the old system, which prioritized the public importance of the user, since April only those who subscribe will be able to have their blue verification mark.
Twitter leaks
Beyond Twitter’s share price, in the last week of March it was reported that part of the social network’s source code was leaked and exposed on the Internet for an undetermined period of time.
The company disclosed this in a legal document filed in the Northern District Court of California.
According to the document, which was advanced by The New York Times, the company led by Elon Musk asked GitHub, a forge for hosting projects using the Git version control system, to deactivate the code where it had been published. The site complied and deactivated the code. It also posted on its website the content of the request made by Twitter to remove the content
The company also asked the court to identify the alleged infringer who published the social network’s source code in the Git version control system without the company’s authorization.
The leak and explosion of the code poses risks that vulnerabilities of the social network have been exposed or linked to users’ private information.
This first week of April 2023, Twitter is also expected to stop highlighting with the blue badge those who have had that mark since before Musk’s arrival and who have not adhered to the “Blue” version, for which there is a fee.
In that sense, the White House said it will not pay to keep their verified accounts. The head of digital strategy confirmed that it is not interested in the service because it does not offer personal verification, as was previously the case.
Related to this issue, Reporters Without Borders criticized this Saturday, April 1, the new management model of the blue Twitter brand, saying that it will generate “confusion between certification and subscriptions” and that it will favor disinformation.
How much Twitter is worth
Twitter has been one of the most popular social networking platforms since its creation in 2006.
The company went public in 2013 and its shares have been an ever-present topic in the big tech media.
With an initial share price of $26, the company raised $1.8 billion from the sale of 70 million shares, making it one of the largest tech IPOs of that 2013.
At the end of its first day of trading, Twitter shares closed at $44.90, up nearly 75 percent from its IPO price. This increase in value was, of course, due to the growth potential the company had.
In the years following its IPO, Twitter’s stock experienced ups and downs.
In 2015, Twitter stock reached an all-time high of $69, but by 2016 it had fallen below $14 per share.
This decline was due to concerns about the company’s ability to grow its user base and generate revenue.
However, Twitter stock rebounded in 2017, reaching a high of $50 per share, thanks to improved user engagement and advertising revenue growth.
In 2018, Twitter’s stock price continued to rise, reaching a high of $47 per share. The company’s strong financial performance and increased user engagement were key drivers of this growth.
In 2019, Twitter stock reached a new all-time high of $45 per share, reflecting the company’s continued growth and profitability.
Despite the pandemic’s impact on the economy in 2020, Twitter’s stock remained relatively stable. In those months, the company’s price fluctuated between major highs and lows, reflecting investor uncertainty about the long-term impact of the pandemic on the company’s revenues.
Beyond Musk’s strong presence and the company’s return to going private, Twitter has a diverse group of investors, including institutional, individual and corporate executives.
Major known shareholders include Vanguard Group, BlackRock and Morgan Stanley.
