Elon Musk’s social media company, X, has raised approximately $1 billion in a new equity funding round, bringing its valuation back to $44 billion, the same price Musk paid when he acquired the company in 2022. Musk, who holds the majority of shares in X, participated in the fundraising, along with other investors such as Darsana Capital, which had previously purchased debt linked to Musk’s buyout of X, and 1789 Capital, a venture firm with ties to Donald Trump Jr.
The funding round, which includes both equity and debt, allows X to pay down some of its more expensive loans. This is seen as a significant step toward stabilising the company’s financials, especially after Musk’s takeover led to a drop in revenues due to changes in platform moderation and advertiser departures. Despite these challenges, the company has shown signs of recovery, posting $1.2 billion in adjusted earnings before interest, taxes, depreciation, and amortisation in 2024.
X’s valuation has also been positively impacted by Musk’s decision to offer a 25% stake in his artificial intelligence company, xAI, to investors in X, which has since reached a $45 billion valuation. While some analysts had previously valued the company at under $10 billion, recent developments, including Musk’s relationship with Donald Trump and increased marketing spend from companies like Amazon, have helped bolster confidence in X’s future.
via FT