Investing.com-- Elon Musk’s X, formerly Twitter, was valued at $44 bln in March, the Financial Times reported on Tuesday, marking a sharp turnaround for the social media site as its CEO gained more influence in the Donald Trump administration.
Investors valued the firm at $44 billion in a “secondary deal” earlier in March, where they exchanged existing stakes in X, the FT report said, citing two people with knowledge of the matter.
X is also working on raising fresh capital- around $2 billion by selling new equity to pay off over $1 billion of junior debt used by Musk to finance his 2022 buyout of Twitter, the FT report said.
The FT report indicates a major reversal in X’s fortunes, whose valuation was seen slumping below $10 billion after Musk’s buyout. The Tesla (NASDAQ:TSLA) CEO had purchased Twitter for $44 billion, and had then shortly after rebranded the firm to X.
Musk’s cost-cutting plans- especially his firing of Twitter’s moderation teams- were received poorly by advertisers, with several major brands pulling out from the site on concerns over hate speech and phishing.
But the FT report showed that Musk’s cost-cutting measures were bearing fruit, and that the company’s core earnings had returned to levels seen before his buyout.
This turn in fortunes happened largely over the past four months, as Musk gained increased influence within the Trump administration. While this development has so far garnered mixed results for Tesla, it was seen driving up X’s traffic, which in turn drew back a swathe of advertisers, including major brands such as Apple (NASDAQ:AAPL) and Amazon.com (NASDAQ:AMZN).
Investor interest in the social media site also increased after Trump’s election victory, allowing a group of seven Wall Street banks to sell almost all of the $12.5 billion loans used by Musk to finance the Twitter takeover.