Months after the valuation of X (formerly Twitter) was estimated to have fallen by 80 per cent, investors are now pegging the social media platform’s value at $44 billion, the same amount Elon Musk purchased the site for in 2022, reports msn.com.
According to The Financial Times, investors are now exchanging stakes in the company at increased value in a secondary deal as the world’s richest man looks to raise additional capital to pay off some of the debt he financed to buy X. The Times reported that in a primary round, Musk aims to bring in $2bn through selling equity in the company, which will be used to offset a billion dollars in junior debt.
“The new $44bn valuation represents a rebound for Musk and the group’s investors, including Andreessen Horowitz, Sequoia Capital, 8VC, Goanna Capital and Fidelity Investments. The deal would help set a price for the upcoming primary round,” the Financial Times noted.
Bloomberg reported last month that Musk was pursuing a new round of fundraising that would value X at the same price he acquired it for – which he admitted at the time he was “obviously overpaying” to buy the social media platform. This also represents the first time that Musk has raised money for the site since he took it private following his acquisition of the then-Twitter.
Musk, who is now President Donald Trump’s ‘first buddy’ and is in charge of the administration’s dismantling of the federal government, saw the social media giant plummet in value immediately after taking it over.
After firing roughly three-quarters of the company’s workforce and all but eliminating the platform’s moderation policies, along with utilising X as his own personal megaphone to sound off on his increasingly extremist political views, Musk has seen a large chunk of users flee the site and a number of businesses pull their advertising.
With revenues initially sinking under Musk’s leadership, investment giant Fidelity Investments estimated last fall that its shares in the company were worth almost 80pc less than they were at the time of Musk’s acquisition. This suggested at the time that the value of X was down to only $9.4bn.
The turnaround in X’s price tag is likely due to several factors. One is that the company’s flatlining advertising revenue has possibly rebounded to pre-Musk levels. According to sources who spoke with the Financial Times, the social media platform recently posted about $1.2bn in adjusted earnings for 2024, which is roughly equal to the company’s performance before the 2022 purchase.
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