IET
The social media platform has been valued at $19bn (£15.6bn) – less than half what the Tesla CEO bought if for a year ago.
The company formerly known as Twitter has valued its equity at $45 a share in an internal note sent to employees, Fortune has reported. The amount is significantly less than then $54.20 per share Elon Musk paid for it upon his acquisition in 2022.
X had previously offered employees stock in March at a $20bn (£16.4bn) valuation.
The company’s new value was probably estimated using a 409A valuation, the independent assessment method recommended by the Internal Revenue Service for private firms. As such, it is not entirely surprising that the value of X has dropped, as this method has a tendency to skew more conservatively than valuations based on venture capital funding and other methods.
This internal valuation marks a 55 per cent drop in X’s value over the past 12 months. The drop could be a result of the stream of controversies that have plagued the social media platform since it was acquired by the owner of Tesla and SpaceX for $44bn (£36bn).
In the last year, Musk has overseen a series of controversial changes within the company, including dissolving the company’s board of directors, making significant changes to the platform’s content moderation and verification policies, and firing 80 per cent of the company’s workers along with a number of additional contractors.
The controversies surrounding X have led several high-profile advertisers to withdraw from the social media platforms. In a bid to recover advertisers’ trust, Musk and chief executive Linda Yaccarino rebranded Twitter as X, saying goodbye to the platform’s iconic bird logo. The decision was part of the process to transform the social media platform into an ‘everything app’ that integrated audio, video and payments features, enhanced by artificial intelligence (AI) tools.
