The Declining Value of X and Musk’s Optimistic Assessment

X’s employees received shares, given that the company is worth 19 billion dollars. This is the first official valuation of the company after it was bought by an American billionaire. The documents state that “the fair market value of the company is determined by X’s board of directors.”

By purchasing Twitter, Musk planned to implement a similar compensation system as he has at his other company, SpaceX. So, for example, employees can sell part of their shares to third parties.

The stock-type compensation offered by X to its employees is known as restricted-type units. Respectively, the shares are earned over four years and become taxable income only after a certain “liquidity event”, such as a stock exchange listing or a sale of the company, internal documents say.

Until recently, X’s employees expressed confusion about the true value of the company. However, Musk’s latest assessment raises doubts. One of X’s biggest investors, Fidelity, believes that Musk’s assessment “is too optimistic”, because in reality the company has lost 65% of its value since Musk became the owner.

In March, Musk announced that the company he bought was worth $20 billion, more than 50% less than the $44 billion the billionaire paid for the company. “Fidelity” believes that the value of the company could not exceed 15 billion dollars.

According to Pew Research, the majority of Twitter users are spending less and less time on the platform, while previously active users are posting less frequently.

It was previously reported that Musk renamed “Twitter” to X in July, thus implementing a plan to turn the company into “the app for absolutely everything.” It envisages introducing a payment system on the platform, as well as increasing the proportion of video content.

According to the analytical company “Guideline”, monthly income from advertising in the US has decreased by at least 55% compared to the time before Musk bought “Twitter”.

2023-11-01 07:23:00
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