‘About $20 billion’: Elon makes bleak Twitter admission

Elon Musk has revealed Twitter is now worth less than what he paid for it, according to a leaked email he sent staff.

Elon Musk has reportedly told Twitter employees that the social network is currently valued at about $US20 billion ($A30 billion), a substantial decrease from the $US44 billion ($A66 billion) he paid for it last October.

The New York Timesand The Information, who read the internal email, reported its purpose was to announce a new stock compensation program but included a warning from Musk that Twitter remained in a precarious financial position and had even briefly been four months away from running out of money.

Musk suggested that “radical changes” at the company, such as mass lay-offs and cost cutting, were necessary to avoid bankruptcy and streamline operations.

“Twitter is being reshaped rapidly,” Musk wrote, telling staff the platform could now be viewed as “an inverse start-up”.

A leaked internal email revealed Elon Musk estimates Twitter to be worth about $A30 billion – less than half the value he paid for it. Picture: Constanza Hevia

However, the updated valuation may not shock the tech billionaire who admitted before he even bought the platform thathe was “overpaying”.

“Myself and the other investors are obviously overpaying for Twitter right now,” he said prior to the October 2022 takeover.

“The long term potential for Twitter in my view is an order of magnitude greater than its current value.”

Twitter was taken private immediately upon Musk’s October 27 takeover, meaning the company was no longer required to be transparent regarding its finances.

Elon Musk has already publicly stated he felt he and other investors overpaid for Twitter. Picture: Justin Sullivan

Musk acknowledged that the company lost revenue as advertisers fled the platform after his takeover, implying bankruptcy was possible.

He previously alluded to companies and activists launching a campaign against his platform ownership.

“A large coalition of political/social activist groups agreed not to try to kill Twitter by starving us of advertising revenue if I agreed to this condition,” he tweeted in the weeks after the takeover in reference to censorship and content moderation.

“They broke the deal.”

The $US20 billion ($A30 billion) valuation places Twitter only marginally ahead of Snap, the parent company of Snapchat, which has recently struggled with an advertising slump and predicted falling revenue.

Elon Musk claimed Twitter could eventually be worth $US250 billion ($A375 billion). Picture: Justin Sullivan

According to the email, Twitter employees will be granted stock in X Corporation, the holding company used to buy Twitter, at the $US20 billion ($A30 billion) valuation.

And despite the seemingly low valuation, Musk forecasted Twitter could eventually be worth $US250 billion ($A375 billion). The new stock compensation program is expected to allow employees to sell the stock every six months, similar to the practice at Musk’s privately held rocket manufacturer SpaceX.

The sales of private stock will provide employees with “liquid stock, but without the stock price chaos and lawsuit burdens of a public company,” according to Musk’s email.