Elon Musk spent $44 billion to acquire Twitter in October 2022, which was most likely an overpayment. He then made major adjustments that drove the company into disarray, causing its ad business and valuation to plummet. After two and a half years, Musk seems on the verge of performing a small miracle: the business, which is now known as X, might once more be worth about what he bought for it.
According to a Wednesday Bloomberg story, X is negotiating a $44 billion valuation for the business. The continuing negotiations could end, according to the unidentified individuals Bloomberg noted, and it’s unclear if X will truly command that price.
However, X’s fortunes abruptly change at the same time as the report. Following a spike in hate speech on X and the discovery of advertisements running alongside pro-Nazi content, major advertisers who had mostly stopped using the site have started to come back. (X blocked a number of pro-Nazi accounts from running advertisements when advertisers left.) According to reports, Apple and Amazon are both reinvesting in X promotions, which is an impressive endorsement from two widely popular firms.
According to multiple recent reports, a group of bondholders who had been deeply in debt were able to sell billions of dollars in their X debt holdings earlier this month at 97 cents on the dollar thanks to the brand’s stabilization, albeit at extremely high interest rates.
Additionally contributing to X’s recovery is the company’s purported ownership of xAI, Musk’s artificial intelligence startup, which, according to Bloomberg, is aiming for a $75 billion value in its most recent funding round.
However, Musk is most likely the main contributor to X’s incredible comeback.
A request for comment from X about the alleged fundraising activities and the potential contribution of Musk’s White House involvement to the platform’s increased worth was not answered.
In the Trump era, X remains as important as ever.
President Donald Trump’s decision to designate Musk as a special government employee has given the wealthiest person in the world significant influence over how the federal government is run, which he has quickly attempted to reform.
In the same way that Trump’s financially troubled social media company, Trump Media & Technology Group (parent company of Truth Social), has a market value of over $6 billion despite having only $3.6 million in revenue for the entire year 2024, investors who wager on X are likely betting on its leader rather than its business.
Musk used the platform to support the president’s campaign last year, transforming X into a pro-Trump machine. He promoted racial conspiracy theories about the Biden administration’s immigration policies and became fixated on the “woke mind virus,” a word some conservatives use to characterize progressive causes, in posts to his 200 million followers.
And now that Trump is back in power and Musk is employed by the executive branch, X has once again emerged as the key social media site for keeping up with and communicating with the Trump administration. A few of Musk’s reforms with his Department of Government Efficiency have also been broadcast on X.
Because of this, X has become indispensable for following news and current events in a way that hasn’t been the case in a long time. TikTok and new Twitter impersonators have taken its place.
Wedbush analyst Dan Ives stated that he believes Trump’s reelection doubled X’s valuation, adding that “the best thing that ever happened to Musk was betting on the Trump White House.”
From (near) zero to hero
Given that Fidelity, whose Blue Chip fund owns stock in X, valued the company in October 2024 at only 20% of the $44 billion Musk spent for it, X’s recovery is astounding.
Three months ago, in December, X had made some progress, but it was still only worth around 30% of what Musk had paid.
Musk transformed Twitter into something that was almost entirely different from what it had been in the months after he bought the company. About 80% of the company’s employees were let go by Musk, who also reversed a previous ban on then-former President Trump, restored the suspended accounts of conspiracy theorists and White supremacists, changed the “blue check” verification system to make it more difficult to identify users, eliminated protections for transgender people from Twitter’s hateful conduct policy, elevated the “Community Notes” user-generated factcheck system to largely replace the company’s own moderation efforts, and publicly harassed advertisers who chose to do business elsewhere.
Furthermore, Musk has not held back from harassing X’s possible revenue streams in order to get them to leave. During the November 2023 DealBook Summit, Musk made a remarkable statement by criticizing Disney CEO Bob Iger and telling advertisers that left X to “go f**k yourself.” Musk suggested Iger should be fired for removing Disney advertisements on X a week later.
X filed a lawsuit against the Center for Countering Digital Hate, alleging that the organization intentionally attempted to alienate X’s advertisers after the group released reports that were critical of the platform’s handling of hateful content. Along with other researchers and internet safety organizations, CCDH published a number of papers that criticized the company’s treatment of hate speech. One of the investigations included evidence indicating Musk was responsible for the rise in anti-LGBTQ+ language. Additionally, it claimed that the network was making money off of accounts that had been blocked but later reactivated to disseminate hate speech.
In the end, a federal judge dismissed the complaint, claiming that it was filed by X and its head, who has referred to himself as a “free speech absolutist,” with the intention of “punishing” the nonprofit organization “for their speech.”
When Musk acquired Twitter, he said that the financially struggling firm needed to permit greater “free speech” and develop into a sort of “everything app” that would function as a consolidated platform for communication, e-commerce, entertainment, news, and payments, much like Weibo and WeChat.
Despite some advancements, such as last month’s announcement of a partnership with Visa to provide digital wallets, X is still far from achieving that goal, largely due to Musk’s contentious actions both inside and outside the company, which have repeatedly damaged user and advertiser trust. Additionally, there are still significant issues with several of X’s older features, such as the audio discussion tool Spaces, during prominent events.
Gil Luria, head of technology research at D.A. Davidson, stated that Musk’s drastic cost-cutting at X might have increased the company’s profitability and margins, thereby increasing its value. However, since Musk made the business private and is no longer required to disclose its financial records, it’s difficult to determine, Luria continued.
It’s possible that the well-known marketers who have returned to X in recent weeks are doing so as part of a larger attempt by tech executives to win over Trump and his supporters. But it’s unknown if they’ll remain when their reputations are at jeopardy in the future. CNN’s requests for comment were not immediately answered by Apple or Amazon.
Furthermore, despite X’s current popularity, it will eventually face far more competition from the other platforms that have emerged since Musk purchased the Bird app.
However, Musk’s ability to save what had turned into—and in many respects still is—a costly platform where extremism has thrived is astounding.
