Elon Musk’s X Valuation Plunges from $43B to $19B: Report
The valuation of Elon Musk’s X (formerly Twitter) is now pegged at $19 billion, down from the $43 billion he paid for the social media firm last year as reported by The Verge.
X Valuation Slashed by 55%
Immediately Elon Musk bought X, the billionaire took the firm private as he became the majority owner in the company whose share price at purchase was pegged at $54.20. The new $19 billion valuation was gleaned based on documents detailing the share allocations to the company’s current employees.
Per this valuation, the awarded stock equity value was pegged at $45 per share. The stock allocation to employees is in fulfillment of one of Elon Musk’s promises to model X’s compensation plans after that of SpaceX. In this model, employees of the firm are allowed to own a share of the company which they can regularly liquidate.
Despite the allowance, it is worth noting that the employee stock offerings are restricted and these shares can only be earned over 4 years from the point they were issued. This model is similar to “vesting” in crypto and it is instituted to protect the shares from being excessively devalued in a short period.
This massive devaluation of X models the general market turmoil and how much of a loss X is for Elon Musk and other top investors in the firm including Binance’s Changpeng “CZ” Zhao.
How Elon Musk is Turning the Tides
Since taking over the firm, Elon Musk has made several changes to X including its corporate structure and monetization plans. Besides hiring Linda Yaccarino as the CEO, Musk also made subscriptions to X Premium mandatory to obtained verification marks.
While this move was initially criticized, X has gained popularity for it, especially with the added features associated with users who secure the verification badges.
Recently, Elon Musk and Linda Yaccarino unveiled plans to turn X into a financial hub such that in a year, users will not need a bank account. This grand plan to venture into Fintech has been teased right from when Musk acquired the firm and with it on its way to becoming a reality, crypto insiders are predicting that a possible integration of non-custodial crypto wallets may also be a part of the plan.
All these plans are adding value to X and are poised to boost its valuation in the long term.
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