Looks like Elon Musk really wanted to get his hands on Twitter, offering over 40 billion last year to buy the social network. At the time of the offer, the amount exceeded the company’s stock market value anyway, so shareholders accepted the offer without much thought. But now, a year after the initial offer and just half a year since Musk took control of the platform, it’s worth less than half.
Elon Musk is offering bonuses in Twitter stock, valuing the company at a total value of $20 billion
The $20 billion amount Twitter is now valued at comes from Elon Musk himself. The company’s CEO has offered Twitter stock bonuses to employees, something that generally happens at the end of the fiscal year. That’s how the total value of the company could be calculated. Musk also says that the value of the company will reach more than $250 billion in the future, promising that the value will increase more than 10 times in the next few years.
But Musk has known Twitter wasn’t worth that much since last year, when he repeatedly tried to change the initial $44 billion offer he made in the spring. Musk claimed the platform was full of bots, and that Twitter’s old management was lying about it. So Musk was demanding a review of Twitter’s value and even threatening to pull out of the deal.
Of course, Twitter stuck to its guns and even threatened to take Musk to court if he refused to buy the company back at the amount originally agreed. Given that Twitter had already lost value on the stock exchange following this deal and the media scandal surrounding the purchase, the company could have demanded huge damages from the South African billionaire.
It’s unclear, however, what Musk’s plans are for the $200 billion-plus valuation. Twitter Blue’s subscription payments don’t seem to be going as the new CEO expected, with subscriptions grossing just $11 million in three months. Also, of the 1,000 largest customers on the ad side prior to the acquisition, only half still have active ads on Twitter. The rest have retired and don’t seem to want to return.