X has seen a significant decline in its valuation since being acquired by Elon Musk last year, new reports state.
The social media platform, which was purchased for a staggering $44 billion, is now valued at a mere $19 billion, marking a 55% decrease in its market worth.
“This revelation came to light when employees at X were recently granted equity in the company at the revised valuation of $19 billion, with each share priced at $45. The equity grants were awarded as restricted stock units, allowing employees to accumulate shares over time. Furthermore, the company disclosed that employees who had previously been granted shares under the previous management would receive a cash payment of $54.20 for those shares.”
The sharp contrast between X’s stock price and its company valuation has raised concerns, with speculation about whether the company has altered the number of available shares to align with its revised worth.
Elon Musk, who took control of the platform last year, has been vocal about his ambition to overhaul the company’s compensation structure to resemble that of SpaceX, another venture under his purview.
Like SpaceX, Musk intends to allow X employees to sell a portion of their shares to external investors, similar to a public company.
Under Musk’s leadership, Twitter, now X, has undergone a remarkable transformation. Within a year, approximately 80% of its workforce, totalling 7,500 employees, have either resigned or been terminated. Musk implemented changes to the platform’s verification process and content moderation guidelines and took on substantial debt to fund the acquisition.
One significant challenge Mr Musk faces is the dwindling advertising revenue, which experienced a nearly 60% decline in the United States during the summer. To address this issue, he has introduced new subscription plans, such as the recently launched Premium+ subscription at $16 per month and the Basic subscription at $3 per month.
These additions supplement the existing $8 per month subscription service, all to boost the platform’s revenue.
As X grapples with its diminished valuation and undergoes substantial changes under Elon Musk’s leadership, the future of the platform remains uncertain.
Only time will reveal whether these strategies will lead to a resurgence of the social media giant.
