The value of X (Twitter), which Elon Musk bought for $44 billion, fell to $19 billion. That's about 55% off the purchase price. In internal business filings, Company X employees were granted stock units (RSUs) and valued at $19 billion, or $45 per share.
This $19 billion valuation represents a 55% discount from the $44 billion purchase price at which Elon Musk bought the company. The fair market value for the stock is determined by the Board of Directors in accordance with tax regulations, and Elon Musk serves as the chairman of the board of directors of Company X.
The company stated that X has the status of a private company. When private companies offer compensation options such as stock to their employees, they often use 409A valuation. 409A determines the valuation of a company using the independent valuation method. However, such assessments tend to be cautious and low.
X's valuation is reduced because the company's value has decreased as a result of the new 409A valuation performed after becoming a private company. Similarly, the valuations of other technology companies have also fallen after such situations.
