Social media giant X reaches $44 billion, boosted by Musk’s close ties to Trump

Social media platform X’s valuation has surged back to $44 billion, marking a significant turnaround in the company's fortunes since Elon Musk became a prominent supporter of US President Donald Trump.

Investors valued X at $44 billion in a secondary deal earlier this month, in which they exchanged existing stakes in the company, Caliber.Az reports via foreign media.

In addition, X is working to raise further capital through a primary funding round, aiming to generate about $2 billion by selling new equity. The funds raised will be used to pay off over $1 billion in junior debt that Musk assumed when he financed his 2022 buyout of Twitter, now known as X. Since Musk's acquisition of the platform, X has relaxed its content moderation policies, resulting in a pullback from many advertisers.

In late September, disclosures from Fidelity Investments indicated that the company’s valuation had fallen below $10 billion, a stark contrast to the $44 billion Musk paid for Twitter. The recent $44 billion valuation marks a recovery for Musk and the group of investors involved, including Andreessen Horowitz, Sequoia Capital, 8VC, Goanna Capital, and Fidelity Investments. 

This valuation will also help set a price for the upcoming primary round. While X’s revenues have dipped since Musk took control, the company reported an estimated $1.2 billion in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for 2024, roughly maintaining the figures seen prior to Musk’s acquisition. Sources familiar with X’s finances suggested that Musk’s cost-cutting initiatives may be showing signs of success, with revenues beginning to improve. However, one individual cautioned that the EBITDA figure was "wildly adjusted." 

Meanwhile, a group of seven Wall Street banks, including Morgan Stanley, Bank of America, Barclays, and MUFG, has sold almost all of the $12.5 billion in loans Musk used to finance his 2022 acquisition of Twitter. The banks had held on to the debt while Musk sought to turn around X’s operations, with equity investors repricing their stakes at steep discounts. Investor interest in these loans grew after Trump’s victory in November, partly due to Musk’s close ties with the new administration as a confidant to the president and the head of the Department of Government Efficiency (Doge), which focuses on reducing government red tape. 

The situation improved further when Musk granted a 25 per cent stake in his artificial intelligence startup, xAI, to investors in X early last year. With xAI valued at $45 billion, the move provided fresh security to X’s lenders and helped boost the platform’s valuation. One banker close to the fundraising noted that the upcoming primary round would help X “clean up the last bit of debt.” The banks had agreed to give the company time to raise new equity or equity-like funding to reduce the remaining junior debt, rather than offloading it when they sold more than $11 billion of loans earlier this year. In addition to these developments, X has seen a boost in advertising spending from major companies like Amazon, coinciding with Musk’s growing relationship with Trump. 

X has also recently added several brands—such as Nestlé, Lego, Pinterest, and Shell—to a lawsuit accusing the companies of previously boycotting the platform illegally. Beyond advertising, X is diversifying its revenue streams and working toward Musk’s vision of the platform as "the everything app."

In January, CEO Linda Yaccarino announced plans to launch X Money later this year, a digital wallet and peer-to-peer payment service, with Visa as its first partner. Furthermore, X is collaborating closely with xAI to integrate AI technology into the platform. The company launched Grok 3, the latest version of its AI chatbot, for premium subscribers. X plans to leverage xAI’s AI technology to enhance its advertising offerings and product development.

By Naila Huseynova