X (formerly Twitter), under Elon Musk’s ownership, has recently secured nearly $1 billion in new equity funding, raising eyebrows regarding its valuation amidst contrasting financial reports. The funding move, reported on March 20, 2025, values the company at approximately $32 billion, a figure that aligns with the worth at the time of Musk's acquisition in 2022.
According to a report by Bloomberg, Musk himself participated in this new funding round. The company is contemplating using part of the proceeds to reduce its existing debt. Notably, this funding includes backing from Darsana Capital Partners, which was involved in a previous deal where they purchased a significant portion of $1 billion in debt tied to Musk’s acquisition.
Interestingly, a separate report from the Financial Times suggests that X’s valuation has rebounded to $44 billion, matching Musk's original purchase price for Twitter back in 2022. This dichotomy in valuation highlights the financial rollercoaster that X has experienced, particularly following a substantial drop in value after Musk’s takeover.
In September 2024, Fidelity Investments had shocked the market by determining that X’s worth had plunged nearly 80%, reducing it to approximately $9.4 billion. This drastic decline was fueled by revenue drops and advertiser withdrawals, shadowed by a lawsuit from the U.S. Securities and Exchange Commission over alleged fraudulent practices that could affect stakeholders by $150 million.
Despite facing such turmoil, the recent funding round suggests a recovery, attributed partly to Musk’s offer of a 25% stake in his AI startup, xAI, valued at $45 billion. Investor interest has reportedly surged since Musk announced plans for X Money, a digital wallet service, and with intentions of integrating artificial intelligence technologies into X's operations.
Furthermore, experts believe Musk's recent political backing of Donald Trump has reinvigorated investor sentiment toward the platform. In financial terms, the earnings picture appears brighter; while annual revenue decreased by nearly 50% to $2.7 billion, X has claimed it is now almost twice as profitable based on adjusted earnings.
Musk has a history of raising funds through private investors rather than public markets, a strategy evident in his other ventures, including SpaceX. Recently, SpaceX completed a ‘tender offer’ that valued the company at $350 billion. Meanwhile, xAI is reportedly seeking additional funding at a valuation of $75 billion, with X holding a $6 billion stake in the AI enterprise.
While the new valuation of $44 billion has been touted in some headlines, skepticism abounds. Financial analysts are questioning the legitimacy of such figures. If X genuinely rebounded so significantly, why did Fidelity adjust the value down to $9.4 billion just months prior? As expressed in a critical commentary, if this new deal at a supposedly inflated valuation is accurate, it either signifies that Fidelity's previous assessment was drastically miscalculated, or that X's profits have surged remarkably.
Reports cite that while X's revenues have decreased since Musk's takeover, the company did report about $1.2 billion in adjusted EBITDA earnings in 2024, raising concerns about potential discrepancies in how these figures are interpreted. The term EBITDA itself is often criticized as misleading, as it does not adhere to a standard measurement, leading to variability in profit calculations across different companies.
The challenge is compounded by X’s status as a private entity post-Musk's acquisition, meaning transparency is lacking compared to when it was publicly traded. Consequently, investors and analysts must rely on inconsistent internal reports and rumors to shape their understanding of the company's financial standing.
A consortium of banks led by Morgan Stanley has cautiously sold off their loans connected to Musk's purchase of Twitter, indicating a retreat from the financial backing once believed to bode well for X’s outlook. Initially aiming for a sale of Twitter-related debt at around 90-95 cents on the dollar, reports suggest they recently sold a substantial tranche at a significantly lowered rate, reflecting shifting risk perceptions.
Therefore, as pertinent questions linger regarding X’s actual valuation—whether it is the lofty $44 billion or closer to the $9.4 billion assessed by Fidelity—the narrative paints a complex picture of financial strategies intertwined with investor sentiments and broader market dynamics.
In the end, while Musk’s maneuvers may temporarily inflate valuations or capture headlines, the long-term realities of X's profitability, market perception, and strategic direction will ultimately dictate its position in the highly competitive social media landscape.
