Last Monday, X employees were rewarded with stakes in the company worth $19 billion, or $45 per share. This price represents a 55% decline compared to the original price paid by Musk, as reported in the documents, which specify that “the fair market value per share is determined by the Board of Directors based on a number of factors, in compliance with the applicable tax regulations”. Of note, Musk is the president of X and has not yet established an official board. After acquiring Twitter, Musk said he wanted to model the company’s compensation plan after the model adopted by SpaceX. Even though SpaceX is a private company, it allows employees to periodically sell a portion of their shares to outside investors. The equity shares awarded to X’s employees are called restricted stock units, or RSUs. These RSUs are granted over the course of four years from the date of grant and require a “liquidity event,” such as an initial public offering (IPO) or sale of the company, to be taxed as income, internal documents explain. Until now, X employees have worked without knowing the true value of the company since it was purchased by Musk. This share information finally answers the question, although it appears that Musk’s assessment may still be too generous. One of its main investors, the fund management company Fidelity, believes that the value of X is 65% lower than at the time of purchase.
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