Source: X is giving employees RSUs at $45 per share, implying a $19B valuation; in March 2023, X offered stock at a $20B valuation; Musk bought Twitter for $44B
i mean to be fair it was probably only worth 20-25 when he bought it, so he only erased 1-6 billion in value personally — also not for nothing it's encouraging to see that rule 701 has some actual bite. like, this is the only reason musk is admitting anything like this at all … Dare Obasanjo / @carnage4life@mas.to : A $19B valuation is based on the hopes and fever dreams of Twitter evolving into PayPal when it's actually becoming Elon's version of Truth Social. — https://www.theverge.com/... X: Adam Cochran / @adamscochran : Honestly, from the price of ads and decline in third-party metrics + brand destruction, that seems wildly optimistic. There is $13B in debt on it from the leveraged buy-out, they reported ad revenue down 50%, but prices on ad RPM are down 70%+ in some regions. Give it a year... @hasanthehun : concerning. Eric Levitz / @ericlevitz : At the time, I thought Musk's strategy of wildly overpaying for a company, and then degrading the quality of its product in every conceivable way, was financially savvy. Gotta eat some crow here Dina D. Pomeranz / @dinapomeranz : Musk's contribution to combat global wealth inequality 🤣😂 Adam Weiss / @adamweiss14 : For context, $SNAP is about 90% off from its ATH (~$131b) from Sept 2021 and is currently valued at $16b. $PINS is about 70% off from its ATH (~$54b) from Feb 2021 and is currently valued at $17b. This below valuation puts X around 70% off from its ATH (~$61.5b) from Feb 2021,... [image] Alexei Oreskovic / @lexnfx : @danprimack Employees at X would probably prefer if Elon Musk used Fidelity's lower valuation, since they want as much as upside for their RSUs as possible. What's the benefit of Musk valuing the company more aggressively? Dan Primack / @danprimack : Slight premium to Fidelity value, but that's not unusual given the way 409a valuations typically work (which is what I assume this is). Jason Goldman / @goldman : 1) META is up 225% in the same time period 2) Find a buyer at that price Kylie Robison / @kyliebytes : Scoop: X, formerly Twitter, is now valued at $19 billion, based on the firm's employee equity compensation plan. The privately-held company, owned by Elon Musk, is giving employees RSUs at a share price $45 according to a source familiar with the matter. https://fortune.com/... Forums: r/Fauxmoi : X is officially worth less than half of what Elon Musk paid for it r/Twitter : X, formerly Twitter, is giving employees equity at a $19 billion valuation r/elonmusk : X, formerly Twitter, valued at $19 billion in new employee stock plan r/EnoughMuskSpam : X, formerly Twitter, valued at $19 billion in new employee stock plan r/EnoughMuskSpam : X is officially worth less than half of what Elon Musk paid for it
FortuneKylie Robison
Context & Ripple Effects
X's employee equity was already being repriced: a March stock-grant offer put the company near a $20 billion valuation, making the new $19 billion RSU reference point a modest further reset rather than a standalone surprise.
The gap between the employee-share valuation and the $44 billion purchase price matters because it turns a private-market judgment into a compensation and retention issue for X staff, not just an investor paper loss.
First-order effects
X employees receiving RSUs are being compensated against a $45-per-share benchmark that implies a substantially lower company value than the acquisition price.
The grant price gives employees and prospective hires a clearer internal signal of the value management is assigning to their equity.
Second-order effects
A lower equity benchmark can make cash compensation, refresh grants, and the perceived upside of staying at X more consequential in retaining talent.
The valuation becomes another reference point for existing investors and any future capital discussions, alongside the earlier employee-grant valuation.
Third-order effects
If private-company compensation grants increasingly disclose lower internal valuations, employee equity can become a more visible channel through which stressed private-market repricings reach the labor market.
The pattern points to a wider separation between headline acquisition prices and the operating valuations used to recruit and retain employees, though a single RSU grant does not establish a market-clearing valuation.
The trend: Private-company repricing is moving from investor marks into employee compensation, making internal equity values a more consequential signal of business health.
Elon Musk's X Corp. emailed employees today with new equity awards. RSUs are priced at $45 per share (kudos to @kylie.robison for getting this first). Here are some interesting details from the paperwork 1/
The new business model for X is the original business model for Twitter which Elon dismantled on taking over the company. An entire year to pull off the strategic equivalent of standing in place while driving away users, decimating its advertiser base and creating openings for c…
maybe if he'd done some due diligence he'd know these (via @reporterzoe) were the existing strategies when he BOUGHT THE COMPANY. it's like he doesn't know that literally everything he's done since has been in *direct opposition* of them.
4) improve our offerings for advertisers to foster more relevant advertisements, improve our measurement tools and grow our advertiser base 5) improve our offerings for creators, including improve video and audio content hosting, and provide better opportunities for creators to m…
Imagine being told that the company you work for was at risk of going bankrupt, and accepting stock in the company as partial payment for your service 🙃
And here is Elon Musk's new business strategy for X, per internal (and accidentally external) documents. 1) serve “as the de facto public town square,” promoting healthy discourse on our platform, making X more enjoyable for users, driving engagement and user growth, thereby incr…
It continues: “Further, X has historically utilized a cost-per-impression advertising model. This model prioritized the number of impressions made over providing users with relevant, targeted ads, which we believe are more likely to result in conversions and return on investment…
Here's the part I found the most interesting, particularly in light of the fact that Elon Musk quickly cut much of the technical staff. The section is about why Musk believes Twitter did not reach its full potential before the takeover: “[W]e believe that X's code base has histo…
First off, some former X / Twitter employees received equity awards. This appears to be a mistake as the paperwork explicitly says: “If the Participant's Continuous Service ceases for any reason...then each RSU that is not an Earned RSU shall immediately be forfeited without the…
Equity awards for X employees are restricted stock units that vest over 4 years and require a liquidity event (IPO, sale, etc) to be realized as income. For a private company, a valuation of $19 billion is effectively Musk setting the floor for what he thinks outside investors w…
@danprimack Employees at X would probably prefer if Elon Musk used Fidelity's lower valuation, since they want as much as upside for their RSUs as possible. What's the benefit of Musk valuing the company more aggressively?
Honestly, from the price of ads and decline in third-party metrics + brand destruction, that seems wildly optimistic. There is $13B in debt on it from the leveraged buy-out, they reported ad revenue down 50%, but prices on ad RPM are down 70%+ in some regions. Give it a year...
At the time, I thought Musk's strategy of wildly overpaying for a company, and then degrading the quality of its product in every conceivable way, was financially savvy. Gotta eat some crow here
For context, $SNAP is about 90% off from its ATH (~$131b) from Sept 2021 and is currently valued at $16b. $PINS is about 70% off from its ATH (~$54b) from Feb 2021 and is currently valued at $17b. This below valuation puts X around 70% off from its ATH (~$61.5b) from Feb 2021,...…
Scoop: X, formerly Twitter, is now valued at $19 billion, based on the firm's employee equity compensation plan. The privately-held company, owned by Elon Musk, is giving employees RSUs at a share price $45 according to a source familiar with the matter. https://fortune.com/...