Elon Musk's Platform X rebounds to $44 billion valuation
Social platform X (formerly Twitter) has reached a valuation of 44 billion dollars, a return to the value at which Elon Musk acquired the service in 2022. This change coincides with the platform's owner acting as a close ally to President Donald Trump, the FT highlights.
According to unofficial reports obtained by the Financial Times, investors value platform X at 44 billion dollars. The valuation occurred in early March as part of a transaction involving the exchange of existing company shares. This is excellent news for Elon Musk, considering that as recently as last September, Fidelity Investments documents suggested that the company's value had dropped below 10 billion dollars.
X is also working on obtaining fresh capital through an investment round to raise approximately 2 billion dollars by selling new shares. These funds are intended to pay off over 1 billion dollars of subordinated debt that Musk agreed to take on to finance the acquisition of Twitter in 2022.
Change in business strategy and collaboration with xAI
After acquiring the group, Musk eased content moderation policies on the platform, leading to the departure of many advertisers. Despite this, according to two people familiar with the matter, the company reported around 1.2 billion dollars of adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in 2024. This is a value close to the period before Musk’s acquisition. It's important to note that one source familiar with the documentation described the EBITDA as "heavily adjusted."
Two other people familiar with X's finances stated that there are signs that Musk's cost-cutting plan is yielding results and revenues are improving.
Investor interest increased in the weeks following Trump's election victory in November due to the billionaire's close ties with the new administration. According to the British economic newspaper, Musk advises the president and leads the so-called Department of Government Efficiency (Doge), which aims to reduce bureaucracy.
Musk's announcement of plans to transfer a 25% stake in his start-up xAI, which focuses on artificial intelligence, to "community" investors may also have influenced X's value. At the same time, Grok 3, a company-created tool, is gaining popularity.
New revenue sources and return of advertisers
Seven Wall Street banks, including Morgan Stanley, Bank of America, Barclays, and MUFG, sold nearly all of the 12.5 billion dollars in loans Musk used to finance the Twitter acquisition in 2022. The banks agreed to give the company time to secure fresh capital or other financing to repay the remaining debt.
Musk can also count on greater company engagement. Recently, giants like Amazon have increased marketing spending on the platform, providing additional support for X.
