Elon Musk values X at $19 billion, down from $44 billion acquisition price

As per reports, Elon Musk bought Twitter for $44 billion a year ago, but he now values it at $19 billion. Employees at X were granted company equity (ownership stake) at a $19 billion valuation, or $45 per share. This is a 55 percent discount from Musk's original purchase.

The $45 per share offered to X employees is actually 55 percent less than what Elon Musk initially paid for Twitter, according to official documents. The documents state that Elon Musk, who currently leads X without an official board, is responsible for determining the fair market value of the shares in accordance with tax regulations.

Musk aims to follow SpaceX's model for the compensation plan, allowing employees to periodically sell some of their shares to external investors. This employee equity is in the form of restricted stock units, commonly known as RSUs.

Taxing RSUs

Employees receive these RSUs over four years, starting from when they are granted. To be considered income for tax purposes, a "liquidity event," like an initial public offering (IPO), is the first time a company's stock becomes available for purchase by the general public on a stock exchange, transitioning from being a privately held company to a publicly traded one. IPO or the sale of the company, must occur. This means that the value of these RSUs will be subject to taxation when the company goes public or gets sold.

Fidelity’s disagreement

Until now, X employees were in the dark about the company's value since Musk's acquisition. These stock awards reveal that, although Musk's valuation is now known, it might still be seen as overly generous. A major investor, Fidelity, believes X is worth a substantial 65 percent less than its purchase price under Musk.