The billionaire owner of Twitter has offered stock grants to the social media app’s shrunken staff at a valuation of about $20 billion, less than half the price he paid in October.
In fact, based on Twitter’s operating performance, the effects of leverage and public market comparisons, the equity is probably worthless.
Net out $13 billion of debt, as of January, and equity holders are left with just over $20 billion, or about the figure reported over the weekend by The Information.
First, Twitter wasn’t generating consistent earnings before Musk bought it, and so it’s hard to believe it’s doing so now.
Back out the debt and the equity is less than zero, assuming their cash position hasn’t meaningfully changed.