The Blubber

Per WSJ

Twitter employees are now being offered stock awards based on the company's valuation of $20 billion. This was less than half of Elon Musk's buying price, but despite that, the new CEO says he sees a path for the stock to 10x.

Musk: “I see a clear, but difficult, path to a >$250B valuation,” meaning stock granted now would be worth 10 times more"

Aside from the valuation, Musk described Twitter through a new approach, calling it an "inverse startup" and saying in his email that his actions when he first bought the company were necessary so it wouldn't go bankrupt.

Per public filings, one of the co-investors that backed Musk's Twitter takeover, Fidelity, wrote down its stake in the company by 56% in November, per public filings.

The email from Musk also revealed that a liquidity event is being planned a year from now. This would be so employees could cash out their equity.

Former employees revealed that Twitter offered stock grants, vested for several years, as part of their compensation. The new grants are expected to vest over four years.

Twitter's last stock-based compensation before going private was in 2021 when it said it would spend nearly $630 million. Upon Musk's takeover, the employee stock grants were converted to cash at $54.20 a share, the acquisition price.

At the start of the year, it was reported that Twitter was cutting employee benefits starting the quarter. This came shortly after the company closed its Twitter Seattle office, and some employees were told to work from home.

Earlier this year, it was also reported that Twitter's revenue was down by 40% year-over-year. During that time, Musk compensated by adding additional features to Twitter, like the 4,000-word limit, which can now be accessed by premium subscribers, and the possibility of placing the social media under a paywall.

See flow at unusualwhales.com/flow.

Other News:

• Twitter is cutting employee benefits starting this quarter
• Twitter's revenue is down 40% year-over-year

Resources:

The Wall Street Journal