After being evaluated at less than 10 billion dollars in September 2024, the social network X has spectacularly returned to a value of 44 billion dollars. The growth is largely due to its owner, Elon Musk, getting closer to President Donald Trump.
Additionally, X is preparing for a funding round to pay off debts and boost platform development. At the same time, the company is diversifying its revenues through investments in artificial intelligence and financial services.
X is growing rapidly
Investors valued the platform at 44 billion dollars in a secondary transaction earlier this month, in which they exchanged existing stakes in the company, according to individuals familiar with the situation, cited by Financial Times.
X is also working on attracting fresh capital through a primary funding round, intending to raise approximately 2 billion dollars by selling new shares.
This capital is intended to be used to pay off a subordinated debt of over 1 billion dollars, which Musk agreed to contract to finance the acquisition of the platform, previously known as Twitter.
Among the platform's important investors are Andreessen Horowitz, Sequoia Capital, and Fidelity Investments.
Two other sources within X claim that Musk's cost-cutting plan is starting to pay off, and revenues have improved. However, another individual noted that the EBITDA value was "strongly adjusted."
X, strong recovery after Donald Trump's victory
Investor interest in these loans increased in the weeks following Trump's victory in the November elections, given Musk's proximity to the new administration as an advisor to the president and leader of the so-called "Department for Government Efficiency" (Doge), aimed at reducing bureaucracy.
Another factor that contributed to the increase in X's value was Musk's decision to offer investors in the social network a 25% stake in his artificial intelligence startup, xAI, at the beginning of last year.
xAI was valued at 45 billion dollars, and this new strategy provided additional assurances to X's creditors, contributing to the platform's value increase.
A banker involved in the financing process stated that the upcoming primary funding round will help X "clean up the last part of the debt."
In a new boost for X, companies like Amazon have ramped up their marketing spending as Musk's relationship with Trump has strengthened.
Expansion into artificial intelligence
Beyond advertising, X is diversifying its sources of income and aims to become what Musk calls the "universal app," writes FT.
In January, CEO Linda Yaccarino announced that by the end of the year, the company will launch X Money, a digital wallet and peer-to-peer payment service, with Visa as its primary partner.
Additionally, X is closely collaborating with xAI to integrate its artificial intelligence technology into the platform, recently launching the latest version of the AI chatbot, Grok 3, for premium subscribers.
According to a source, X intends to use the AI technology developed by xAI to enhance its advertising offers and products.
D.D.