Elon Musk puts Twitter's value at just US$20 billion

NEW YORK - Elon Musk has put the current value of Twitter at US$20 billion (S$26.6 billion), less than half of the US$44 billion he paid for the social media platform just five months ago, according to an internal email seen by American news media.

The email to employees dealt with a new stock compensation programme in the San Francisco-based company and the attribution to employees of stock in X Holdings, Twitter’s umbrella company since

Mr Musk purchased it in late October.

The compensation plan values the platform at US$20 billion, slightly more than that of Snap (US$18.2 billion), parent company of Snapchat, or of social network and creative website Pinterest (US$18.7 billion), both of which, unlike Twitter, are publicly traded.

An emailed query from AFP sent to Twitter’s communications department generated an automatic response in the form of a poop emoji.

In the internal email, Mr Musk describes the brutal contraction in Twitter’s value. He says the platform faced such grave financial difficulties that at one point, it was on the verge of bankruptcy.

“Twitter was trending to lose ~$3B/year,” he said in a message posted on Saturday on the platform.

He cited a revenue drop of US$1.5 billion a year and a debt-servicing burden of the same amount – leaving it with “only 4 months of money”.

Mr Musk, Twitter’s majority share holder, added simply: “Extremely dire situation.”

But he then said that with advertisers – many of whom fled the platform after the mercurial billionaire bought it – now beginning to return, “It looks like we will break even” in the second quarter of the year.

Since taking control, he has sharply trimmed the group’s payroll, from 7,500 to fewer than 2,000 employees.

He said in the email that he sees a “clear but difficult path” to a valuation of US$250 billion, without saying how long that might take.

Mr Musk, who is also the chief executive of Tesla Inc. and aerospace group SpaceX, said that Twitter would allow employees of the social network to cash in shares every six months.

Meanwhile, the New York Times reported that parts of Twitter’s source code, the underlying computer code on which the social network runs, were leaked online, according to a legal filing.

It is considered a rare and major exposure of intellectual property as the company struggles to reduce technical issues and reverse its business fortunes under Mr Musk.

Twitter moved on Friday to have the leaked code taken down by sending a copyright infringement notice to GitHub, an online collaboration platform for software developers where the code was posted, according to the filing.

GitHub complied and took down the code that day. It was unclear how long the leaked code had been online, but it appeared to have been public for at least several months.

Twitter also asked the US District Court for the Northern District of California to order GitHub to identify the person who shared the code and any other individuals who downloaded it, according to the filing.

Twitter launched an investigation into the leak and executives handling the matter have surmised that whoever was responsible left the San Francisco-based company last year, two people briefed on the internal investigation said.

Executives were only recently made aware of the source code leak, people briefed on the internal investigation said. One concern is that the code includes security vulnerabilities that could give hackers or other motivated parties the means to extract user data or take down the site, they said.

Mr Musk did not respond to a request for comment about Twitter’s leaked code. GitHub declined to comment on the decision to remove the code, but posted Twitter’s takedown request on its website. AFP, NYTIMES