Elon Musk's platform X rebounds to original $44 billion valuation
Social platform X (formerly Twitter) has reached a valuation of 44 billion dollars. This marks a return to the value for which Elon Musk acquired the service in 2022. The change comes at a time when the platform's owner has become a close ally of President Donald Trump, the FT reports.
According to unofficial reports accessed by the Financial Times, investors value platform X at 44 billion dollars. The valuation occurred as part of a transaction conducted at the beginning of March involving the exchange of existing company shares. This development is excellent news for Elon Musk. As recently as September of last year, documents from Fidelity Investments 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, which Musk agreed to take on to finance the acquisition of Twitter in 2022.
Change in business strategy and collaboration with xAI
After the group's acquisition, 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 would be a value close to the period before Musk’s acquisition. It's important to note that one person 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 following Trump's election victory in November due to the billionaire's close relations with the new administration. Musk advises the president and heads the Department of Government Efficiency (Doge), which aims to reduce bureaucracy, according to the British Economic Newspaper.
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
A group of 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.
