Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Elon Musk’s X has raised about $1bn in a new equity funding round that values the social media company at $44bn, bringing its valuation back in line with the price the billionaire paid in 2022.
Musk, X’s majority shareholder, was among those who purchased the shares, according to several people familiar with the matter. Darsana Capital, an investor that has bought debt tied to Musk’s X buyout, and 1789 Capital, a venture firm whose partners include Donald Trump Jr and has invested in other Musk companies, also participated.
The fundraising, which values X at $44bn including debt, comes as Musk has forged close ties to Donald Trump and assumed a central role in the US president’s attempt to reduce the size of the federal government.
Shares in Tesla, the electric automaker co-founded by Musk, have tumbled recently as some consumers have shunned the brand, but parts of his private empire have been boosted.
Seven banks that had been holding on their balance sheets $12.5bn in loans linked to Musk’s 2022 buyout of X, then known as Twitter, have been able to offload most of it this year, helped by surging appetite for the debt.
The banks were left holding just over $1bn of junior debt after the recent deals.
The latest equity raise will give X the cash to pay down the junior loan, several people briefed on the situation said. It will remove one of the most expensive loans X had been saddled with in the buyout, with one person noting the junior capital cost the company about 13 per cent a year.
Separately, Musk also purchased additional stock in the company from existing investors last year. According to public filings from Kingdom Holding Company, a Saudi conglomerate and X investor, Musk bought $150mn worth of stock in the company.
In recent weeks, X also conducted another secondary market deal, which also valued X at $44bn.
A return to the original purchase price has been a symbolic target for Musk, according to one investor in X. After taking over the group, Musk loosened the platform’s moderation policies, and many advertisers left, pushing revenues lower.
Disclosures from Fidelity Investments, an X backer, in late September implied a valuation for the company that was less than $10bn.
But some groups, including Amazon, have boosted marketing spending recently, as Musk’s relationship with Trump has deepened.
The company’s finances have also shown signs of improvement, according to investors, and X posted $1.2bn in adjusted earnings before interest, taxes, depreciation and amortisation in 2024. That is roughly flat with the period before Musk’s takeover, though a person familiar with the matter noted the figure was subject to significant adjustments.
X’s valuation has also been significantly boosted by Musk’s decision to grant a 25 per cent stake in his artificial intelligence start-up xAI to investors in the social media company early last year. xAI has leapt to a $45bn valuation since it was founded in 2023.
X declined to comment. 1789 and Darsana declined to comment.
Bloomberg first reported that the equity fundraising round had closed.
