Social platform X bounces back to $44B with Musk-Trump alliance
The social platform X (formerly Twitter) has reached a valuation of $44 billion, marking a return to the value at which Elon Musk acquired the service in 2022. This change comes as Musk has become a close ally of President Donald Trump, emphasizes the Financial Times.
According to unofficial reports obtained by the Financial Times, investors value platform X at $44 billion. This valuation occurred in early March when existing shares in the company were exchanged. This is great news for Elon Musk, as documents from Fidelity Investments suggested last September that the company's value had fallen below $10 billion.
X is also working on raising fresh capital in a funding round to secure approximately $2 billion by selling new shares. These funds are intended to repay more than $1 billion in subordinated debt that Musk agreed to incur to finance the takeover of Twitter in 2022.
Change in business strategy and collaboration with xAI
After acquiring the group, Musk relaxed the platform's content moderation policy, leading to the departure of many advertisers. Nevertheless, according to two people familiar with the matter, the company showed approximately $1.2 billion in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in 2024. This would be a value close to the period before Musk's acquisition. It should be noted that one person familiar with the documentation described the EBITDA as "heavily adjusted."
Two other individuals familiar with X's finances suggested signs that Musk's cost-cutting plan is yielding results and that revenues are improving.
Investor interest increased following Trump's election victory in November due to Musk's close relationship with the new administration. Musk advises the president and leads the Department of Government Efficiency (Doge), which aims to reduce bureaucracy, according to the British Economic Daily.
Musk's plans to transfer a 25% stake in his AI-related startup, xAI, to "community" investors may also have influenced the value of X. Meanwhile, Grok 3, a company tool, is gaining popularity.
New revenue sources and the return of advertisers
A group of seven Wall Street banks, including Morgan Stanley, Bank of America, Barclays, and MUFG, sold nearly all of the $12.5 billion in loans Musk used to finance the acquisition of Twitter 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 engagement from companies. Recently, giants like Amazon have increased marketing spending on the platform, providing additional support for X.
