New investment round will value X at $44 billion — that’s how much Musk paid for Twitter

Elon Musk and his associates spent $44 billion to buy social media giant Twitter in 2022, though he fought hard to bargain down the price from the time he revealed his intentions in April of that year until the deal was finalized in October. Now, he is reportedly ready to raise money from investors in X for the first time since that deal.

Image source: Unsplash, Garrett Overheul

It is symbolic that the first round of X financing in the recent history of this platform should value the company’s capitalization at $44 billion. It is generally accepted that during the years of Elon Musk’s ownership of X, the capitalization of these assets fell below this level. So far, negotiations on attracting an additional tranche of funds to finance the development of X have not yet been successful, and may cease altogether.

It is believed that after Donald Trump’s victory in the US presidential election last November, investors began to believe more in the market potential of Elon Musk’s companies, who became a close ally of the current president. Tesla’s capitalization grew by more than 40% after Trump’s victory, and the aerospace company SpaceX became the most valuable startup in the technology sector with a current capitalization of about $350 billion.

Formally, X also owns a stake in the xAI startup, valued at $6 billion. Musk founded the company in 2023 to develop artificial intelligence systems. It is believed that he now has the opportunity to attract investors’ funds to the xAI capital, based on a capitalization estimate of $75 billion. Back in December last year, according to Fidelity Investments, the assets of the former Twitter were valued at 70% below the purchase price of October 2022. Andreessen Horowitz, Sequoia Capital and Qatar Investment Authority also participated in the purchase of Twitter.

Musk’s purchase of Twitter was carried out with borrowed funds, and the investment banks that financed the deal have only now managed to resell these debt obligations on the financial services market without a significant discount. Morgan Stanley had hoped to resell this $3 billion debt back in 2023, but it has only now come close to a deal on acceptable terms.