Elon Musk Bringing Advertisers Back To X: Amazon Boosts Spending, Apple Considers Return

Elon Musk's past comments may have scared away advertisers from his X social media platform, which he bought for $44 billion in 2022.

A new report says two of the largest companies in the world could provide a boost to X's advertising revenue.

What Happened: Musk's push for free speech and changes to content moderation on X led to some advertisers exiting the platform completely or cutting down their level of spending.

Amazon.com Inc AMZN is a current advertiser on X and is ramping up its spending on the platform, according to a report from the Wall Street Journal.

The e-commerce giant previously pulled a large portion of its advertising a year ago when concerns about hate speech on the platform were elevated.

The report said Amazon CEO Andy Jassy was involved in the decision to increase spending on the platform. While the report doesn't say that Amazon founder Jeff Bezos was part of the decision, the timing of the announced ad spending increase comes after Musk and Bezos have been part of several appearance together.

Both billionaires were present at President Donald Trump's inauguration and a once very public rivalry between the two appears to have been minimized due to Musk's political influence within the Trump administration.

Along with the news that Amazon is set to increase its spending on X, the report said Apple Inc AAPL is also considering testing ads on the platform. Apple previously pulled all of its ad spending on X in 2023.

Apple's X account has 9.7 million followers and no posts. The account has been used for advertisements and sponsored posts in the past and caused confusion when the account went silent with no posts.

Apple CEO Tim Cook was a donor to the Trump inauguration. Apple and Musk's SpaceX were recently part of a collaboration with T-Mobile iPhone users getting access to Starlink.

The moves by Amazon and Apple come as Musk is viewed as one of the top allies of Trump and he heads the Department of Government Efficiency, which is in charge of cutting government spending.

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Why It's Important: News of a potential windfall in additional advertising spending comes at an interesting time for X.

Investment banks including Morgan Stanley MS who were part of the financing of the $44 billion buyout have been trying to sell off their debt, as Benzinga recently reported. Some banks were willing to sell the debt at 10% discounts.

Banks are looking to sell off $3 billion in loans, as reported by Bloomberg.

News of the debt sales is providing a better look at the financials of X, which went private with Musk's purchase. The report said X had adjusted EBITDA of $1.2 billion in 2024. This includes having EBITDA of $400 million on $710 million in revenue in the fourth quarter.

The fourth quarter could have gotten a bump with record usage reported during the 2024 presidential election, an event that likely saw increased advertising revenue.

The EBITDA figure is around flat from when Musk bought the company according to the report. One big difference noted is the $1.4 billion cash on the balance sheet in 2022 versus a cash balance of $400 million today.

Bloomberg reported that investors are becoming more interested in buying the debt that banks are trying to sell off as signs of Musk turning around X are becoming more prevalent. Also drawing interest is ownership stakes in xAI that were awarded to investors of the Twitter buyout.

The bank's debt was previously receiving offers of 60 to 65 cents on the dollar versus the 90 to 95 cents offered today. Banks have received interest payments on their debt, but many have held the debt longer than they do on loans due to lower valuations assigned to X after Musk took over.

Fidelity, which owns shares of X Holdings in the Fidelity Blue Chip Growth Fund (FBGRX), valued X at $12.3 billion recently. While the company increased its valuation of X by 32.3% at the time, it valued X at 72% less than Musk paid.

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