Elon Musk puts $20 billion value on Twitter: Report

Twitter CEO Elon Musk has offered the social-media company's employees stock grants at a valuation of nearly $20 billion, The Information reported on Saturday. The valuation is half the amount he paid to buy Twitter. In October last year, Musk paid $44 billion to acquire the micro-blogging site. The report said it was an acknowledgment of how much Twitter's value has dropped since the deal — but it is still well above public market valuation levels for Twitter's rivals.

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In December last year, Musk said Twitter was on track to be "roughly cash flow break-even" in 2023 as top advertisers slashed their spending on the social media platform after his takeover.

The report said as Musk has projected that Twitter will generate less than $3 billion in revenue this year, and taking into account the company's $13 billion in debt, the $20 billion valuation implies a multiple of 11 times this year's revenue to an implied enterprise value of $33 billion.

After taking over Twitter, Musk had said his company was losing $4 million a day. To cut the cost, the billionaire moved to slash staff strength and fired nearly 70 per cent of staff. "Regarding Twitter's reduction in force, unfortunately, there is no choice when the company is losing over $4M/day," he wrote then.

In January this year, a research firm reported that advertising spending on Twitter had dropped by 71 per cent in the previous month, December. The decline came as top advertisers reduced their spending on the social media platform following the takeover by Musk. Twitter ad spending saw a 55 per cent drop in the month of November from the previous year. Another report said Twitter's revenue was down 40 per cent year over year.

Twitter's primary source of revenue remains advertising and after Musk's takeover, the social media company witnessed a mass exodus of the top brands. However, Musk managed to lure some advertisers back by offering heavy discounts. He has also rolled out subscription-based verification to shore up the revenue.