Elon Musk-owned X rebounds to original valuation of $44B
What's the story
Elon Musk's social media platform X has regained its original $44 billion valuation.
The resurgence comes after a deal earlier this month where investors valued the website at the same amount he paid for it in October 2022.
The agreement involved trading existing stakes in the company and was reported by Financial Times.
Transformation
X's journey from Twitter to its current status
Musk rebranded Twitter as X in the summer of 2023. Since his takeover, he has loosened the site's moderation policies, causing many advertisers to temporarily halt or leave.
In November 2023, Musk accused advertisers of trying to "blackmail" him with boycotts at a New York Times DealBook Summit.
Subsequently, X sued an international advertising alliance and several major corporations for conspiring to boycott the platform and intentionally reducing its revenue.
Reversal
X's new valuation reflects remarkable turnaround
The new $44 billion valuation for X comes as a major turnaround for the platform and its investors, such as Andreessen Horowitz, Goanna Capital, Sequoia Capital, 8VC, and Fidelity Investments.
This secondary deal will also set a price for the primary fundraise of $2 billion that X is currently seeking.
The money from this round will be used to retire over $1 billion in junior debt.
AI impact
Stake in xAI boosts X's valuation
In early 2023, institutions that lent money for Musk's acquisition of X were offered a 25% share in his artificial intelligence start-up, xAI. This has helped boost X's valuation.
Despite a decline in revenues since Musk's takeover, the social media platform had reported adjusted profits of $1.2 billion last year.