Elon Musk's X Seeks $44 Billion Valuation In New Funding Round Amid Renewed Investor Interest: Report

Tesla Inc. CEO Elon Musk‘s social media company, X, is reportedly in discussions with investors to secure funding at a $44 billion valuation.

What Happened: Elon Musk’s X is in talks to secure new funding at a $44 billion valuation, reported Bloomberg on Wednesday. The report notes that the ambitious valuation signals a significant shift in the company’s fortunes. Initially, investors were hesitant about the debt used in Musk’s acquisition due to fears of overpayment and potential advertiser loss from policy changes.

However, Musk’s prominent position in President Donald Trump's administration has seemingly improved investor sentiment regarding X’s future. Bloomberg also observed a revived interest in X, coinciding with a surge in user activity, especially ahead of the 2024 U.S. presidential election.

X did not immediately respond to Benzinga’s request for comment.

In January, the Wall Street Journal also reported that Amazon AMZN increased its advertisement expenditure on Elon Musk’s X. In February, Apple Inc. AAPL also returned to X with its ads after a hiatus of more than a year. Several companies had pulled much of their advertising from the platform amid concerns over increasing hate speech.

Why It Matters: The current valuation discussions come after Fidelity raised its valuation of X Holdings in December after a reassessment. This marked a positive turn after months of devaluation, suggesting a potential recovery in X’s market perception. However, Fidelity’s valuation at $12.3 billion remained 72% below Musk’s initial buyout price.

Notably, In January, the Wall Street Journal obtained an internal email wherein Elon Musk expressed concerns about the financial health of X. Musk stating that growth on his platform was "stagnant" and that the revenue is "unimpressive". He also stated "And we're barely breaking even.” However, Musk later denied having sent any such internal email.

Meanwhile, Bloomberg also reported that last week, Morgan Stanley MS successfully completed the sale of $3 billion in X debt at full face value, following strong investor demand.

As X navigates these financial waters, the outcome of the funding round will be a critical indicator of its market standing and future growth prospects.