Elon Musk’s social media platform, X, previously known as Twitter, is reportedly in discussions with investors to raise funds at a valuation of $44 billion.
This is according to a Bloomberg report citing sources familiar with the matter.
This valuation matches the price Musk paid to acquire the company in 2022.
The potential funding round marks a significant turnaround for the social media giant, which faced a wave of user and advertiser departures following Musk’s takeover and subsequent overhaul of the platform.
While talks are ongoing, the details of the financing round could still change, and the company may ultimately decide to abandon the fundraising efforts, the sources added.
This would be the first known investment round for X since Musk took the company private in 2022.
X’s financial recovery and debt revaluation
The potential funding round comes after a period of financial challenges for X. In December 2023, prior to the current discussions, Fidelity Investments marked down the value of its stake in X by about 70% from the $44 billion acquisition price.
- However, recent developments suggest a shift in sentiment.
- X’s debt has also seen a positive revaluation. Last week, Morgan Stanley finalized the sale of $3 billion worth of X debt at face value, without any discount, according to sources.
- This marks a significant improvement from earlier attempts to offload the debt, which were met with hesitation from potential buyers.
- The strong demand from investors indicates growing confidence in X’s financial stability and future prospects.
Musk’s broader business ventures gain momentum
Elon Musk’s other ventures have also seen notable successes in recent months. Tesla Inc., his electric vehicle company, has seen its shares surge more than 40% since the election of former President Donald Trump, with whom Musk has maintained a close relationship.
Additionally, SpaceX, Musk’s aerospace company, recently achieved a staggering $350 billion valuation, solidifying its position as the world’s largest tech startup.
- Musk has also been active in raising capital for his other ventures. His artificial intelligence startup, xAI, is currently seeking funding at a valuation of approximately $75 billion, according to sources.
- While the terms of the deal are not yet finalized, the proposed valuation reflects growing investor interest in Musk’s AI ambitions.
- Notably, X holds a $6 billion stake in xAI, further intertwining the fortunes of Musk’s companies.
What you should know
Musk’s close ties to President Donald Trump have also influenced perceptions of X’s future. Some investors believe Musk’s political connections could benefit his businesses, including X, by advancing their interests in regulatory and policy matters.
Prominent investors who backed Musk’s acquisition of X in 2022 include Andreessen Horowitz, Sequoia Capital, and the Qatar Investment Authority.
Their continued support could play a crucial role in the success of the current funding round.
