The valuation of the social media giant X has rebound back to $44 billion after its owner Elon Musk became an active ally of the current US President Donald Trump, Financial Times reports citing its sources.
- It is said that investors valued the platform at $44 billion in a secondary transaction, when shareholders exchange their shares in the company.
- The new valuation is a recovery for Musk and his investors, including Andreessen Horowitz, Sequoia Capital, 8VC, Goanna Capital and Fidelity Investments. The deal will also help set the price for a future investment round.
- In addition, X is working on raising approximately $2 billion in a new investment round through the sale of new shares. The capital will be used to repay more than $1 billion in debt that Musk took on in 2022 to finance the purchase of the company (then Twitter).
After the acquisition of Twitter, Musk weakened the content moderation policy, which led to an exodus of advertisers. At the same time, the valuation of the company by Fidelity Investments in September 2023 was less than $10 billion. Musk acquired Twitter for $44 billion in 2022.
Although X's revenue fell after Musk acquired Twitter, the company still reached about $1.2 billion in EBITDA in 2024, roughly in line with pre-acquisition numbers, two sources said.
Two others said Musk's cost-cutting plan is starting to work and the company's revenue is growing. And another source said the EBITDA number was "significantly adjusted."
Meanwhile, Musk's other company, Tesla, is not doing so well. Hedge funds betting on a drop in Tesla's stock have made $16.2 billion, as the company's value has dropped by more than $700 billion since December, and Musk's fortune has dropped by more than $100 billion.
