The valuation of Twitter was required under SEC rules because Musk is giving shares to employees as bonus rewards. You can mock him (rightly so) for losing half the company's value, but to be fair he said the company was damn near worthless when he bought it (maybe why he tried to back out of the deal). He hopes to rebuild it to a valuable company again. Good luck with that, but I'm just making the point that this valuation didn't just come out of the blue, nor is it unexpected.
What would have been scandalous is if Musk had falsely inflated the valuation. If you're giving stock as a bonus, you have to assign some kind of realistic value to that stock.
For anyone inside the stock investment world, this really isn't any kind of news. If anything, the Wall Street response is that maybe that valuation is a bit to high.
I personally think he's going to fail, but he's trying to do what Michael Dell did when he took Dell private. The value of that company also tanked afterwards, but eventually became worth four times what it was when it went private.
"When stupidity is considered patriotism, it is unsafe to be intelligent." - Isaac Asimov