Tuesday, May 28

Elon Musk Values Twitter at $19 Billion, Nearly Half of Purchase Price

Elon Musk’s Twitter valuation has taken a significant hit since his acquisition of the platform a year ago. Originally purchased for $44 billion, Musk now values it at $19 billion.

Internal documents obtained by The Verge reveal that on Monday, X employees were granted equity in the company at a valuation of $19 billion, equivalent to $45 per share. This valuation reflects a 55% reduction from Musk’s initial purchase price. The documents specify that the fair market value per share is determined by the Board of Directors, adhering to relevant tax regulations. It’s worth noting that Musk chairs X and has yet to establish a formal board.

Since assuming control of Twitter, Musk has expressed interest in emulating SpaceX’s compensation structure. Like SpaceX, X is privately held, but it allows employees to periodically sell a portion of their shares to external investors. The equity granted to X employees takes the form of restricted stock units (RSUs). These RSUs vest over a four-year period from the date of grant and require a “liquidity event,” such as an IPO or company sale, for taxation as income, as outlined in the internal documents. (Fortune initially reported X’s self-valuation at $19 billion.)

Until now, X employees had been working without knowledge of the company’s valuation since Musk’s acquisition. This recent stock award announcement finally provides an answer, although Fidelity, one of Musk’s major investors, believes X is worth 65% less than its acquisition price.

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