Looks like Elon Musk wants Twitter staff to buy company stocks despite low value

Twitter is reportedly valued at less than half of what Elon Musk paid to take over the company in October 2022. In an email to employees at Twitter, Musk reportedly estimated the company's valuation at $20 billion; while he had paid $44 billion only about 6 months ago.

The decreasing valuation of the company was reported by the Platformer and the Information, based on a leaked memo by Musk to some employees of the company offering stock options. 

Stock options: 

Elon Musk seems to be softening up to remaining employees at Twitter by offering stock options after a wave of layoffs, resignations, and an overall toxic working environment. 

• You must have heard of stock options offered to employees before. It is usually a common practice at startups. 
• Stock options are used as an incentive for employees. They are also said to be more flexible than stock grants in the way they can be sold. 
• In Twitter's latest stock options case, the shares are reportedly vested after 6 months. 
• It is also a way to encourage employees to work towards taking the company to a higher valuation. 
• In this case, Musk is promising to take Twitter to more than $250 billion, implying a 10-fold increase in share value. 

• However, he does say that the path is "difficult". 
• The same email also justified its recent layoffs stating that Twitter was around four 4 months from running out of money if not for the exits.
• There are around 7,500 employees at Twitter when Elon Musk took over. Now, there are about 2,000 left. 

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Elon Musk's track record with stock grants and options:

• Right after Musk closed the $44 billion Twitter deal last year there were concerns among employees that they will be fired before their shares are vested, so that the company can avoid payouts. 
• Elon Musk refuted claims he was firing people to avoid payouts and Twitter management also reassured it wasn't going to happen. 
• But reports said that some top executives like the then-CEO Parag Agarwal were let go before their shares could be vested to avoid large payouts. It is not clear whether they were paid for the vested shares or not. 
• Earlier too, around 50 ex-employees of Tesla filed a lawsuit against the Elon Musk company for removing them from their jobs right before their shares were vested to avoid payouts. 

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Twitter's performance: 

• Twitter's performance has not been great after Musk's takeover; so much so that its valuation has reportedly halved in less than 6 months of the takeover. 
• TechCrunch earlier reported that Twitter Blue only made $11 million in mobile-only subscriptions in its first three months of launch. 

• Twitter Blue has been the flagship launch by Twitter after Elon Musk's takeover, which wants users to pay for the blue ticks. 
• A recent BBC report also raised the concern that the company is no longer able to assure safety from trolling, state-co-ordinated disinformation, and child sexual exploitation after massive layoffs and resignations. 
• The report also states that while Twitter was never perfect before, hate speech and violent trolling have increased since Musk's takeover. 
• Advertisers, who brought a major chunk of revenue to Twitter, have already fled the platform following changes to content moderation policies. 

Surrounded by this atmosphere, it needs to be seen who will take up Elon Musk's generous offer of stock options.

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