In October 2022, Elon Musk paid $44 billion to buy Twitter — almost certainly an overpayment — and he promptly made significant changes that plunged the company into chaos and sent its ad business and valuation into a tailspin. Two and a half years later, Musk appears close to pulling off a minor miracle: The company, now called X, may once again be worth about what he paid for it.
Bloomberg on Wednesday reported that X is in talks to raise money that would value the company at $44 billion. The anonymous sources Bloomberg cited acknowledged that the ongoing talks could break down, and it’s not clear whether X will actually fetch that valuation.
But the report coincides with a sudden turn in fortunes for X. Big advertisers, who had largely abandoned X after hate speech surged on the platform and ads were seen running alongside pro-Nazi content, have begun to return. (X made several pro-Nazi accounts ineligible for ads following advertiser departures.) Amazon and Apple are both reportedly reinvesting in X campaigns again, a remarkable endorsement from two brands with mass appeal.
The brand’s stabilization helped a group of bondholders, who had been deep underwater in their investments, sell billions of dollars in their X debt holdings at 97 cents on the dollar earlier this month — albeit with exceedingly high interest rates — according to several recent reports.
Also helping X’s rebound: It reportedly holds a stake in xAI, Musk’s AI company, which itself is seeking a $75 billion valuation in a latest funding round, according to Bloomberg.
But the biggest factor in X’s stunning bounce-back is almost certainly Musk himself.
X did not respond to a request for comment on the reported fundraising efforts, or the role that Musk’s White House involvement could play in the platform’s heightened valuation.
X is as relevant as ever in the Trump era
Musk’s elevation to a special government employee under President Donald Trump has empowered the world’s richest person with large sway over the operations of the federal government, which he has rapidly sought to reshape.
Investors betting on X are probably making a gamble on its leader, not its business — similar to how Trump’s financially struggling social media company, Trump Media & Technology Group (parent company of Truth Social), has a market value of more than $6 billion, even though its revenue for all of 2024 was just $3.6 million.
Last year, Musk turned X into a pro-Trump machine, using the platform to boost the president’s campaign. In posts to his 200 million followers, he pushed racist conspiracy theories about the Biden administration’s immigration policies and obsessed over the “woke mind virus,” a term used by some conservatives to describe progressive causes.
And now, with Trump back in office and Musk working in the executive branch, X has once again become the most important social media platform for following and interacting with the Trump administration. Musk has also used X to broadcast some of his changes with his Department of Government Efficiency.
That has suddenly made X essential for keeping up with news and of-the-minute conversation in a way it hasn’t been for quite some time — overshadowed by TikTok and upstart Twitter lookalike platforms.
“The best thing that ever happened to Musk was betting on the Trump White House,” said Wedbush analyst Dan Ives, who added that he estimates Trump’s reelection doubled X’s valuation.
From (near) zero to hero
X’s turnaround is stunning considering Fidelity, whose Blue Chip fund holds a stake in X, valued the company in October 2024 at just 20% of the $44 billion that Musk paid for it.
By December, just three months ago, X had recovered somewhat but was still worth only around 30% of what Musk paid.
In the months following Musk’s Twitter purchase, he made the company virtually unrecognizable from its former self. Musk laid off roughly 80% of the company’s staff, reversed a previous ban on then-former President Trump, reinstated the suspended accounts of White supremacists and conspiracy theorists, reshaped the “blue check” verification system in a way that made it harder to identify people on the platform, removed specific 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 bullied advertisers that took their business elsewhere.
And Musk himself hasn’t been shy about tormenting X’s potential sources of revenue for leaving. In one extraordinary moment in the November 2023 DealBook Summit, Musk called out Disney CEO Bob Iger and told advertisers that left X to “go f**k yourself.” A week later, Musk said Iger should be fired for pulling Disney ads from X.
After the Center for Countering Digital Hate published reports critical of the platform’s response to hateful content, X sued the group, accusing it of deliberately trying to drive away X’s advertisers. CCDH — in addition to other researchers and online safety groups — had released a series of reports criticizing the company’s handling of hate speech, including providing evidence, for example, that anti-LGBTQ+ rhetoric had jumped under Musk’s leadership. It also said the platform was monetizing some previously banned but then reinstated accounts that were spreading hateful content.
A federal judge ultimately tossed the lawsuit, arguing that the case — brought by X and its leader who has called himself a “free speech absolutist” — was aimed at “punishing” the non-profit group “for their speech.”
Musk said when he bought Twitter that it was a financially troubled company that needed to allow more “free speech” and to become a kind of “everything app” — similar to Weibo and WeChat — a centralized platform for payments, e-commerce, entertainment, news and communication.
Although X has made some progress, including announcing a partnership with Visa last month to offer digital wallets, it’s nowhere close to realizing that dream — in large part because Musk’s controversial moves both within and outside of the company have repeatedly caused trust issues for users and advertisers. And even some of X’s longtime features, like the audio conversations tool Spaces, continue to suffer major glitches in high-profile moments.
Still, Musk’s dramatic cost cutting at X may have improved the company’s margins and improved its profitability, potentially bolstering its value, said D.A. Davidson’s head of technology research Gil Luria. But, Luria added, it’s hard to tell since Musk took the company private and no longer must publish its financial results.
The prominent advertisers that have made their way back to X in recent weeks may be doing so as part of a broader effort by tech leaders to gain favor with Trump and his allies. But it’s unclear whether they’ll stick around through any future risks to their reputations. Apple and Amazon did not immediately respond to CNN’s requests for comment.
And although X may be having a moment, in the long run, it faces far more competition from the rival platforms that have cropped up since Musk bought the bird app.
Still, it’s stunning that Musk was able to salvage what had become (and in many ways still is) a very expensive platform where extremism has flourished.
