Elon Musk’s ambitious $44 billion acquisition of Twitter in October 2022 initially seemed like a financial misstep, with the platform—now rebranded as X—suffering advertiser pullbacks, a sharp decline in valuation, and internal upheaval. However, recent reports suggest that Musk may be on the verge of a major comeback, with X now in talks to raise funds that could restore its valuation to the original purchase price.
According to Bloomberg, these fundraising discussions remain ongoing and could still fall through. However, the timing aligns with a significant shift in X’s fortunes, particularly as major advertisers such as Amazon and Apple are reportedly reinvesting in the platform. Their return follows X’s recent measures to restrict ads from appearing alongside extremist content, an issue that had previously led to widespread advertiser withdrawals.
Adding to X’s resurgence, bondholders who once faced substantial losses have recently managed to offload billions of dollars in X-related debt at 97 cents on the dollar, despite high interest rates. Furthermore, X’s stake in Musk’s AI venture, xAI—currently seeking a $75 billion valuation—has contributed to renewed optimism around the platform’s financial outlook.
Musk’s Influence and X’s Political Relevance
A significant driver of X’s recovery appears to be Musk himself. As a key figure in the Trump administration, Musk has positioned X as the primary platform for political discourse and real-time updates from the White House. Analysts suggest this alignment with the current political landscape has boosted investor confidence.
Last year, X became an active hub for pro-Trump messaging, with Musk frequently amplifying conservative narratives to his 200 million followers. This shift has coincided with increased engagement on the platform and a renewed sense of relevance amid competition from emerging social media platforms.
X’s Road to Recovery
Just months ago, X’s financial outlook was dire. In October 2024, Fidelity’s Blue Chip fund valued the company at just 20% of Musk’s original purchase price. By December, that figure had risen to 30%, but it remained well below expectations.
Following his takeover, Musk implemented sweeping changes, cutting nearly 80% of X’s workforce, reinstating previously banned accounts—including those of controversial figures—and restructuring the platform’s verification system. These changes sparked backlash, leading to an exodus of advertisers and concerns over content moderation.
Musk’s confrontational stance toward departing advertisers also made headlines. In a bold moment at the November 2023 DealBook Summit, he singled out Disney CEO Bob Iger, telling advertisers who left X to “go f**k yourself.” He later called for Iger’s removal from Disney leadership.
Amid rising scrutiny, X faced legal challenges, including a lawsuit against the Center for Countering Digital Hate (CCDH), which accused the platform of monetizing harmful content. However, a federal judge dismissed the case, ruling that it was an attempt to silence criticism.
The Future of X
Musk originally envisioned X as an all-encompassing digital platform, akin to China’s WeChat, integrating payments, e-commerce, and entertainment. While X has made strides—such as its recent partnership with Visa to offer digital wallets—it has yet to fully realize that vision.
Despite technical challenges, including glitches in its Spaces audio feature, Musk’s cost-cutting measures may have improved X’s financial margins. However, as a private company, X no longer discloses its financial performance, making it difficult to assess its true profitability.
While X’s resurgence appears promising, its long-term success remains uncertain. The return of major advertisers may be influenced by broader efforts to align with the current administration, but whether they will maintain their presence on the platform remains to be seen. Additionally, X continues to face fierce competition from alternative social media platforms that emerged following Musk’s acquisition.
For now, however, Musk has managed what once seemed impossible—bringing X back to a valuation close to its original $44 billion price tag.
