Elon Musk says Twitter needs changes to prevent bankruptcy
Twitter CEO Elon Musk said in a statement that employees will receive stock-based awards valued at $20 billion. Wall Street Journal. That’s less than half the $44 billion Mr Musk spent to acquire the social media platform in October last year.
Mr Musk expressed optimism about the social media company’s future in a statement to employees. “I see a clear but difficult path to a $250B valuation,” he said, adding that the shares on offer now would be worth ten times that.
In an email reviewed by the outlet, Mr Musk said Twitter was seeing changes too quickly to ensure the company “could be considered a reverse startup”. According to the email, he said significant changes were needed in part to prevent Twitter from going bankrupt.
According to a separate email sent to employees on Friday, the company informed its employees that it will offer additional equity grants to employees, which will begin six months from now. The company intends to offer a cash flow event in about a year, at which time employees will be able to vest some of their shares, it added. However, it is noteworthy that no information is available on the number of employees receiving equity awards.
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Since Mr Musk’s takeover of the microblogging site last year, there have been many questions, including questions about compensation for employees. According to former employees, Twitter often offered stock grants as part of employees’ pay over time, the outlet noted.
The new grants, which are separate and in addition to any legacy Twitter equity converted to cash at the time of the acquisition in October 2022, will be over a four-year period, according to the email.
According to regulatory filings, Twitter has spent about $630 million on stock-based compensation in 2021, the last full year it publicly reported financial results before going private.
