Social Network X Has Rising in Price to $44 Billion — That’s How Much Elon Musk Paid for It in 2022

Investors have valued Elon Musk’s social network X at $44 billion as part of a secondary deal in which they swap stakes in the company, the Financial Times reported, citing two people familiar with the matter. The company has risen sharply since Musk became a staunch ally of President Donald Trump.

Image source: x.com/elonmusk

X itself is also looking to raise about $2 billion in additional capital to pay down more than $1 billion in debt, which was incurred in 2022 when Musk took out loans to buy what was then known as Twitter. He bought the social network for $44 billion and relaxed its moderation policies, prompting a mass exodus of advertisers; X was valued at $10 billion as of the end of September last year. The platform’s revenue has fallen since the takeover, but it is expected to reach $1.2 billion in 2024 before interest, taxes, depreciation, and amortization, roughly the same level as before Musk took over. There are signs that Musk’s cost-cutting plan is working, with revenue growing, two people familiar with the matter said; EBITDA was “heavily adjusted,” another added.

Musk received $12.5 billion in loans from seven banks, including Morgan Stanley, Bank of America, Barclays, and MUFG, to buy Twitter in 2022 — almost all of which have already been sold. Interest in these bonds grew after Trump’s victory in the presidential election, as Musk became his confidant and headed the Department of Government Efficiency (DOGE). An additional incentive early last year was the transfer of a 25% stake in the businessman’s startup xAI, which specializes in artificial intelligence technologies, to X investors. xAI itself was valued at $45 billion, the new agreement became an additional guarantee for X’s creditors, and the estimated value of the platform increased. The banks agreed to give the company time to raise funds to repay part of the debt obligations and did not sell them — in January and February, they sold obligations worth more than $11 billion.

Another boost has come from increased spending by advertisers like Amazon. As Musk’s relationship with Trump has deepened, X has sued the advertisers who left, claiming they were illegally boycotting the platform, and recently added brands like Nestlé, Lego, Pinterest, and Shell to its lawsuit. Now X is making money from more than just advertising, with Musk still pursuing the idea of ​​turning the platform into a super app. CEO Linda Yaccarino announced in January that X Money, a digital wallet and peer-to-peer payment service, would launch this year, with Visa as its first partner. The company has been working closely with xAI to integrate AI into the platform; on Monday, March 17, the social network launched the latest version of its AI chatbot, Grok 3, to premium subscribers. xAI’s technology will also help improve its advertising service and other products.