Startup Lagos

25-Feb-2025

Fresh News

Elon Musk’s X in Talks to Raise Funds at $44 Billion Valuation 2 months ago

Elon Musk's social media platform, X—formerly known as Twitter—is reportedly engaged in discussions with investors to raise funds at a valuation of $44 billion. This information comes from a Bloomberg report citing sources familiar with the matter, indicating that the valuation aligns with the price Musk paid to acquire the company in 2022.

A Significant Turnaround

The potential funding round represents a notable turnaround for X, which has experienced a wave of user and advertiser departures following Musk's takeover and subsequent overhaul of the platform. While negotiations are ongoing, the details of the financing round may still evolve, and the company could ultimately opt to abandon its fundraising efforts, according to the sources.

If successful, this would mark the first known investment round for X since Musk took the company private in 2022.

Financial Recovery and Debt Revaluation

The discussions regarding new funding come after a challenging financial period for X. In December 2023, Fidelity Investments marked down the value of its stake in X by approximately 70% from the original $44 billion acquisition price. However, recent developments indicate a shift in sentiment towards the platform's financial outlook.

X's debt has also undergone a positive revaluation. Last week, Morgan Stanley successfully sold $3 billion worth of X debt at face value, without any discounts. This sale signifies a significant improvement from earlier attempts to offload the debt, which faced reluctance from potential buyers. The strong demand from investors suggests growing confidence in X's financial stability and future prospects.

Musk's Broader Business Ventures Gain Momentum

In addition to X, Elon Musk's other ventures have seen notable successes in recent months. Tesla Inc., Musk's electric vehicle company, has seen its shares surge more than 40% since the election of former President Donald Trump, with whom Musk has maintained a close relationship.

Furthermore, SpaceX, Musk's aerospace company, recently achieved an impressive $350 billion valuation, solidifying its status as the world's largest tech startup. Musk is also actively raising capital for his artificial intelligence startup, xAI, which is reportedly seeking funding at a valuation of approximately $75 billion. Although the terms of this deal are not yet finalized, the proposed valuation reflects increasing investor interest in Musk's AI ambitions.

Notably, X holds a $6 billion stake in xAI, further intertwining the fortunes of Musk's various companies.

Investor Confidence and Political Connections

Musk's close ties to former President Donald Trump have influenced perceptions of X's future. Some investors believe that Musk's political connections could benefit his businesses, including X, by advancing their interests in regulatory and policy matters.

Prominent investors who backed Musk's acquisition of X in 2022, including Andreessen Horowitz, Sequoia Capital, and the Qatar Investment Authority, may continue to play a crucial role in the success of the current funding round.

As discussions progress, the future of X and its potential funding raise remain closely watched by investors and industry analysts alike.

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