Elon Musk’s social media company, X (formerly Twitter), is once again looking to raise funds. (New York Post) Reports suggest that the company is in discussions with existing investors and potential backers, aiming for a valuation of $44 billion—the same price Musk paid when he acquired it in October 2022.
X’s Financial Landscape and Strategic Moves
X has faced several financial ups and downs over the past few years. While advertising revenue has declined, the company has focused on premium subscription models and a deeper integration with xAI, Musk’s artificial intelligence company, as new sources of income.
By the end of 2024, X’s revenue had dropped to $2.7 billion, a significant decline from its $5 billion revenue in 2021. However, its adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) has nearly doubled, indicating improved profitability.
Backing from Banks and Investor Sentiment
Signs of financial stabilization for X have emerged, as Morgan Stanley and a group of major banks recently sold a significant portion of the $4.74 billion debt tied to Musk’s acquisition, leaving just $1.3 billion outstanding.
However, some investors remain skeptical. Fidelity Investments previously slashed the valuation of its stake in X, estimating the company’s worth at around $12.5 billion, far below its original purchase price.
AI and Premium Services:
X is no longer just a social media platform. Musk envisions transforming it into an “all-in-one app” that includes payment services, a content creator ecosystem, and AI-powered features. The company also plans to integrate its operations with xAI, which is currently raising funds at a valuation of $50–$75 billion.
Can X Justify Its $44 Billion Valuation?
The ongoing funding round will be a crucial test of whether investors still believe in Musk’s ambitious vision for X. While the company has undergone significant changes, it continues to face challenges in advertising and user growth.
If X successfully secures investment at this valuation, it will signal renewed confidence in Musk’s leadership and long-term strategy. However, if investor interest remains lukewarm, X may need to rethink its business model and revenue approach.
X’s latest fundraising efforts and financial performance remain under close scrutiny. The company is evolving toward Musk’s goal of a “super app”, but its success will depend on whether it can regain the trust of advertisers, investors, and users.