X rebounds to $44 billion as Musk strengthens Trump ties
The social platform X (formerly Twitter) has reached a valuation of $44 billion. This marks a return to the value at which Elon Musk acquired the service in 2022. This change comes when the platform's owner has taken the role of a close ally of former U.S. President Donald Trump, emphasising the Financial Times.
According to unofficial reports from the Financial Times, investors value platform X at $44 billion. This valuation was part of a transaction in early March involving the exchange of existing shares in the company. This is excellent news for Elon Musk. As recently as September of last year, documents from Fidelity Investments suggested 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.
Change in business strategy and collaboration with xAI
After acquiring the company, Musk relaxed the content moderation policy on the platform, 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 is 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 people familiar with X's finances suggested 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 Musk's close relationship with the new administration. According to the British Economic Daily, Musk advises the president and leads the Department of Government Efficiency (Doge), which aims to reduce bureaucracy.
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 tool created by the company, may also have influenced X's popularity.
New revenue sources and the return of advertisers
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. 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.
