From crisis to comeback: X reclaims $44 billion valuation under Musk

Social media platform X has seen its valuation climb back to $44 billion, marking a sharp turnaround in the company’s financial standing since its owner, Elon Musk, positioned himself as a key ally of President Donald Trump.

According to two sources familiar with the matter, quoted by Financial Times, investors valued X at $44 billion earlier this month in a secondary deal where existing shareholders exchanged stakes, per Caliber.Az.

In addition, X is working on a primary funding round to raise approximately $2 billion by selling new equity, which would be used to pay off more than $1 billion in junior debt that Musk took on to finance his 2022 acquisition of the platform, then known as Twitter, several insiders revealed.

Since assuming control, Musk has relaxed the platform’s content moderation policies, leading to an exodus of advertisers. By late September, disclosures from Fidelity Investments suggested X’s valuation had dropped below $10 billion — far below the $44 billion Musk originally paid for Twitter. 

The recent valuation surge signals a significant recovery for Musk and X’s investors, which include Andreessen Horowitz, Sequoia Capital, 8VC, Goanna Capital, and Fidelity Investments. The deal also sets a benchmark for pricing in the upcoming primary funding round.

While X’s revenue has declined since Musk’s takeover, the platform posted about $1.2 billion in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in 2024, according to two sources.

This figure is roughly consistent with pre-acquisition earnings. Two additional sources noted that Musk’s cost-cutting measures are showing results, with revenue trends improving. However, another source warned that the reported EBITDA figure was “wildly adjusted.” 

Meanwhile, a group of seven major Wall Street banks — including Morgan Stanley, Bank of America, Barclays, and MUFG  —have offloaded nearly all of the $12.5 billion in loans Musk used to fund his acquisition of Twitter. These banks had been holding onto the debt as X underwent restructuring, with equity investors marking down their stakes significantly.

Investor sentiment toward X’s loans improved in the wake of Trump’s election victory in November, as Musk’s influence within the new administration grew — particularly as head of the Department of Government Efficiency (DOGE), a role focused on cutting bureaucratic red tape.

Further bolstering X’s financial standing, Musk granted investors in the social media company a 25% stake in his artificial intelligence startup, xAI, last year. With xAI now valued at $45 billion, this strategic move has provided added security to X’s lenders and contributed to its valuation rebound.

One banker involved in X’s fundraising efforts remarked that the upcoming primary round would help the company “clean up the last bit of debt.” Instead of selling the remaining junior debt outright, the banks gave X time to secure fresh equity or equity-like funding, two sources confirmed.

By Tamilla Hasanova