Social Media Platform X Reaches $44 Billion Valuation Amidst Revenue Decline

The social media platform X has been reassessed by investors, now pegged at a valuation of $44 billion--matching the price Elon Musk paid for Twitter. This valuation stems from a recent funding round earlier this month, where shares were exchanged at prices reflecting this overall worth. Just a month prior, reports indicated that X anticipated regaining this valuation, albeit based on financial metrics that do not align with those of larger corporations.

The Financial Times reports that internal figures from X suggest a pre-tax profit of approximately $1.2 billion last year, comparable to Twitter's performance prior to Musk's acquisition. However, Bloomberg recently highlighted that X's revenue for 2024 was only half of what it was in the year leading up to Musk's takeover. These numbers could indicate that Musk's stringent cost-cutting strategies are yielding results. Nonetheless, the Financial Times has referred to sources claiming that X's financial data have been 'significantly adjusted,' leaving the company's true financial standing uncertain.

Since Musk's acquisition of Twitter in late 2022, the platform underwent major transformations. Despite several waves of user departures that appeared to impact the service's stability, the overall valuation of the now-private company consistently declined until the recent resurgence following Donald Trump's re-election as U.S. President. Musk's alignment with Trump has been evident, establishing him as one of Trump's close associates. In contrast to some controversies surrounding Musk, such as his provocative gestures and the handling of layoffs at Tesla, the situation for X appears markedly different.

In mid-February, it was revealed that the banks financing Musk's Twitter purchase had sold off a significant portion of their loans, incurring only minor losses. This marked a notable shift, as the value of these loans had previously dipped to just 60 percent of their worth. A couple of months prior, selling them would have resulted in losses of 10 to 20 percent. Additionally, corporations like Amazon have reportedly increased their advertising spending on X, while Musk has taken a more aggressive stance towards re-engaging advertisers who had previously pulled back.