Elon Musk’s social media platform X is reportedly in discussions with investors to raise capital at a valuation of at least $44 billion, which matches the price Musk paid to acquire the company—then known as Twitter—in October 2022. The potential funding round, first reported by Bloomberg here, marks a significant milestone for a platform that has faced skepticism over its financial viability since Musk’s takeover. If successful, this would be the first known capital infusion since Musk took X private, offering a potential lifeline to reduce its substantial debt burden and fuel ambitious expansions into payments and video services.
The talks, which remain fluid and could still fall apart, come as X navigates a volatile trajectory under Musk’s leadership. After acquiring Twitter for $44 billion—a price he famously acknowledged as an overpayment—Musk steered the company through a tumultuous period marked by advertiser exodus, mass layoffs, and a sweeping rebrand to X. Fidelity Investments, an early backer, slashed its valuation of X by nearly 70% in December 2024, reflecting widespread doubts about its prospects. Yet, recent developments suggest a reversal of fortunes. Posts on X and reports from outlets like Reuters indicate that banks, led by Morgan Stanley, have successfully offloaded portions of the $13 billion in loans tied to Musk’s acquisition, buoyed by renewed investor confidence and the return of some advertisers.
This potential $44 billion valuation aligns with a broader resurgence in Musk’s ecosystem. Tesla Inc.’s stock has soared more than 40% since the November 2024 U.S. presidential election, driven by Musk’s high-profile role in President Donald Trump’s administration. SpaceX, another Musk venture, hit a $350 billion valuation in December 2024, up 67% from June. X’s 10% stake in xAI, Musk’s artificial intelligence outfit behind the newly launched Grok 3 model, further bolsters its appeal to investors eyeing synergies across his empire. “The valuations of Musk’s other companies have soared as he’s taken a significant role in Trump’s administration,” noted a Yahoo Finance report, underscoring the halo effect now lifting X.
Still, challenges linger. X’s revenue plummeted to $2.7 billion in 2024 from $5 billion in 2021, per Investopedia estimates, largely due to advertisers fleeing amid content moderation controversies and Musk’s polarizing public persona. Yet profitability has improved, with adjusted EBITDA nearly doubling, according to Morningstar. The company’s pivot to a broader “everything app” vision—integrating payments, video, and AI-driven features—mirrors the success of platforms like WeChat, though execution risks remain high. “More will be revealed,” mused one X user (@ivan_bezdomny), hinting at the opacity still shrouding X’s financials and strategic roadmap.
The timing of this fundraising effort is notable. Musk’s influence in Washington, where he leads the Department of Government Efficiency (DOGE), has sparked both optimism and scrutiny. Critics, including Democratic lawmakers, question whether his access to federal data could benefit his private ventures, including X. Meanwhile, his feud with OpenAI’s Sam Altman—highlighted by a rebuffed $97 billion bid for the AI giant—underscores the competitive stakes in tech’s next frontier. Posts on X reflect a mix of sentiment:
@TheCactus71 quipped, “Wonder how many journalists and ‘experts’ predicting the death of X will apologise now,” while @bcclist countered, “Somebody’s gonna let @elonmusk know @X isn’t worth shit in 2025, correct?”
For investors, the $44 billion question is whether X can sustain this valuation. The debt sale’s success—at no discount, per X chatter—suggests market faith in Musk’s turnaround prowess. Yet, as the New York Post reported, the deal’s specifics remain in flux, and abandonment remains a possibility. If completed, the funds could ease X’s $13 billion debt load, a legacy of its leveraged buyout, while bankrolling Musk’s vision of a multifaceted digital platform. Analysts see parallels to Musk’s past triumphs: transforming Tesla from a niche player to a trillion-dollar titan, or SpaceX’s dominance in aerospace. But X’s reliance on advertising—a sector still wary of its volatility—tempers expectations.
Wall Street will watch closely. A successful raise could silence doubters who pegged X’s worth as low as $4 billion, as Fox Business’s Charlie Gasparino once speculated while affirming its intangible value as a cultural and political force. “As a business, he overpaid,” Gasparino wrote on X, “but as a force for change, the value of @X is immeasurable.” For Musk, who thrives on defying odds, this funding round could be another chapter in his saga of reinvention—or a rare stumble in his relentless march forward.
from WebProNews https://ift.tt/G7JHWId
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