In 2022, Elon Musk made headlines with his acquisition of Twitter for a staggering $44 billion. The bold move has since stirred a whirlwind of controversy and speculation.
Initially, the deal faced turmoil as advertisers and their budgets dwindled, leading to a significant drop in Twitter's valuation—plummeting nearly 70%. Investors were rattled, marking down the company’s worth dramatically. Yet, recent reports suggest a surprising rebound in its evaluation, with some investors now valuing Twitter, rebranded as X, at its original purchase price of $44 billion.
But what truly underlies this valuation? Is there a remarkable turnaround at X, or is this merely a facade born out of speculation?
In the wake of his acquisition, Musk openly acknowledged doubts about the price he paid for the social media platform. As advertising revenue evaporated almost immediately, many high-profile users opted to leave, citing concerns about the platform's future under Musk's leadership. Nonetheless, a notable number of influential figures still maintain their presence on X.
While rival platforms like Bluesky, Meta's Threads, and Donald Trump's Truth Social have emerged to challenge X, none have matched its level of cultural and political relevance. Observers argue that Musk's connections within the political sphere, particularly his ties to former President Trump, engender a unique appeal for advertisers who may consider returning to the platform, especially in light of a shifting political landscape.
However, recent conversations within advertising circles reveal that many brands are not fully embracing X. Instead, they are cautiously re-entering the platform to mitigate potential legal complications and political risks—an approach described by advertising executives as essentially playing defense.
This defensive strategy raises further questions. With a key component of X's recovery hinging on a resurgence of brand advertising, can the platform justify a return to its previous valuation?
Financial reporting from trusted sources like Bloomberg and the Financial Times sheds some light on X's current financial health. In 2024, X reportedly achieved an 'adjusted' EBITDA of $1.2 billion. While this figure seems promising, industry insiders caution that it comes with serious caveats. An unnamed source characterized the number as 'wildly adjusted,' suggesting that the financial metrics might not tell the whole story.
Twitter's ownership stake in Musk's AI company, xAI, complicates the narrative as well. Worth approximately $6 billion, this stake might be driving investor confidence as they speculate about xAI's future potential in an industry that is rapidly evolving.
For many investors, the affinity for being involved with Musk's ventures seems to outweigh their concern for X's immediate profitability or performance. Investors leverage this 'potentials-driven' strategy, possibly leading them to overlook the actual operating performance of X.
Notably, following Musk’s takeover in October 2022, there has been a rising trend of technical problems and outages reported on the platform. Observers highlight that since the relaunch as X, the platform has been plagued with operational issues, suggesting these may stem from workforce reductions. Approximately 30% of X’s staff were laid off post-acquisition, resulting in several infrastructure challenges.
On March 10, 2025, a large-scale cyberattack triggered disruptions, leaving over 40,000 users without access to the platform. Elon Musk cited this incident as a serious blow to the platform's stability. This adds to earlier outages, such as a global failure in December 2023 that received over 70,000 complaints within an hour, raising concerns about the platform's reliability.
Musk has claimed that revenue has halved since the acquisition, which has certainly cast a shadow over X's future. Such uncertainty can have far-reaching implications on advertising success, something the platform heavily relies upon. On top of the public relations concern regarding operational reliability, the rise of hateful and incendiary content has also been reported on the platform since Musk's takeover, further damaging its reputation.
Despite the doubts swirling around X, it remains to be seen whether this ambitious platform can prove that it’s worth the renewed interest from investors. With its complicated financials and evolving reputation, X continues to expose the precarious balance between investment enthusiasm and platform reliability.
As debates around the platform simmer between market analysts and users, the overarching trajectory for X remains uncertain. The intertwined complexities of content moderation, user trust, and brand loyalty shape every development within the platform, steering X through turbulent waters as it strives to redefine its identity in a rapidly evolving digital landscape.
