Twitter employees get new stock grants from Elon Musk
After six months, employees that vest after six months will get a new equity grant from Twitter CEO Elon Musk.
The stock grants come at a valuation of near $20 billion, less than half of the $44 billion that Musk had paid to acquire the social media platform, according to an email to staff the publication had reviewed.
The company plans to hold a liquidity event in the next year, when workers can cash out of their equity. The grants will be in place for a period of four years.
Musk said in the email that he was optimistic about the company's future. He said that a stock granted now would be worth ten times more because of the clear, but difficult path to a $250 B valuation.
The CEO said that Twitter is being reshaped so quickly that it can be considered an inverse startup. He said radical changes were necessary to make sure that Twitter won't go bankrupt.
Also, read Also: Musk Slammed For Saying That Twitter Is Seeking 'The Least Wrong Truth' With Community Notes Feature
As part of employees' compensation, Twitter has typically offered stock grants that vest over several years. According to the Wall Street Journal, stock-based compensation is a popular way to attract talent at many tech companies.
In 2021, Twitter spent $630 million on stock-based compensation. It had more than 7,500 full-time employees at the time.
In February, Musk emailed staff, saying the company would make significant stock and other compensation awards based on performance and that the team would receive more information on March 24.
Musk previously predicted that Twitter would generate less than $3 billion in revenue this year. The company's debt is $13 billion and the $20 billion valuation implies a number of 11 times this year's revenue to an implied enterprise value of $33 billion, according to The Information.
The company posted a net loss of $270 million in the second quarter, which ended on June 30, 2022, compared to a loss of $66 million in the same period the previous year.