Social media platform X has regained its $44 billion valuation, marking a significant turnaround for the company since Elon Musk took over. The surge in valuation comes amid Musk’s growing ties with US President Donald Trump and efforts to expand X beyond social media.
According to sources familiar with the matter, investors exchanged existing stakes in the company earlier this month in a secondary deal, pushing X’s valuation back to the price Musk originally paid to acquire Twitter in 2022. The company is also working on a fresh funding round, aiming to raise $2 billion to pay off over $1 billion in junior debt tied to Musk’s acquisition.
X’s Financial Recovery and Cost-Cutting Moves
Despite revenue drops following Musk’s takeover, X posted around $1.2 billion in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in 2024—roughly in line with its pre-Musk earnings. Insiders suggest Musk’s aggressive cost-cutting strategies are yielding results, with signs of revenue improvement. However, one source noted that the reported EBITDA figure was “wildly adjusted.”
Investor sentiment toward X’s debt has improved, particularly after Musk transferred a 25% stake in his artificial intelligence startup, xAI, to X’s investors. xAI has since been valued at $45 billion, adding security to X’s lenders and bolstering the platform’s market position.
Trump Connection Boosts Investor Interest
Interest in X’s loans surged following Trump’s election victory in November, largely due to Musk’s influence in the new administration. Musk has become a key advisor to Trump and leads the Department of Government Efficiency (Doge), a body focused on cutting regulatory red tape.
Several Wall Street banks, including Morgan Stanley, Bank of America, and Barclays, have offloaded nearly all of the $12.5 billion in loans Musk used to finance his Twitter takeover. The banks had been holding onto the debt as X struggled to turn around operations, but Musk’s growing political ties and new revenue strategies have renewed investor confidence.
Expanding Beyond Social Media
Beyond advertising, X is diversifying its revenue streams as it pushes toward Musk’s vision of becoming an “everything app.” The company plans to launch X Money, a digital wallet and peer-to-peer payment service, later this year, with Visa as its first partner.
Additionally, X has integrated AI into its platform through xAI’s chatbot Grok 3, which was launched for premium subscribers this week. The AI-powered tool is expected to enhance X’s advertising offerings and product development.
Meanwhile, Musk’s legal battles continue, with X adding major brands like Nestlé, Lego, Pinterest, and Shell to a lawsuit alleging they participated in an illegal boycott of the platform.
With a $44 billion valuation back on the table and new funding rounds on the horizon, Musk’s efforts to reshape X appear to be gaining traction. However, questions remain about the platform’s long-term revenue stability and reliance on Musk’s political influence.