Elon Musk-owned social media platform X (formerly Twitter), which recently nearly doubled the price of its X Premium+ plan, is now seeking fresh funding. According to a report by Bloomberg, the micro-blogging platform is reportedly in discussions to raise funds at a valuation of $44 billion. This is the same amount Musk paid for the company during its acquisition in 2022.
The discussions are ongoing, and specific details, including the amount to be raised, have not been finalized, as per the report. The current fundraising talks at a $44 billion valuation indicate a possible turnaround for X.
Notably, after Musk’s takeover in 2022, X experienced a substantial decline in value. In fact, last year, Fidelity Investments estimated that X’s worth had plummeted by nearly 80%, valuing the company at approximately $9.4 billion. This devaluation was attributed to a sharp drop in advertising revenue and controversies surrounding content moderation policies.
Talking about the significance of the development, for Musk and his co-investors, this potential fundraising at the original purchase valuation could recoup previous losses and restore confidence in X’s financial health. Meanwhile, for Tesla investors, this development may ease concerns about Musk diverting resources or attention from Tesla to support X.
Additionally, Elon Musk’s support for the new US President, Donald Trump, and his increasing influence on government policy are improving investor sentiment toward X. Earlier this month, banks sold around $5.5 billion in debt backed by X at a smaller-than-expected discount, which clearly indicates that the market sees less risk associated with X’s financial future than previously expected.
But everything is still not smooth for the company as last month US Securities and Exchange Commission filed a lawsuit against X over allegedly committing fraud with its investors. According to the SEC’s new lawsuit, this could be a case of defrauding the company’s stakeholders of $150 million.
Speaking of financials, the company’s annual revenue dropped significantly – by nearly 50% over two years, falling to $2.7 billion last year. But X is now reportedly nearly twice as profitable based on adjusted earnings.
In the meantime, Musk has also been active in raising capital for his other ventures. His artificial intelligence startup, xAI, is reportedly seeking funding at a valuation of approximately $75 billion. This is noteworthy as X holds a $6 billion stake in xAI.
