Elon Musk’s social network, X, has successfully raised nearly $1 billion in new equity from investors, as reported by individuals familiar with the proceedings. This new influx of funds values the company similarly to when Musk took it private in 2022.
Insiders revealed that Musk himself participated in the fundraising effort. The company is reportedly considering utilizing a portion of the raised capital to reduce its outstanding debt, according to one individual with knowledge of the company’s strategies.
The equity of X is now valued at approximately $32 billion. The original Twitter acquisition involved at least $12.5 billion in debt, indicating that this latest round of fundraising was accomplished at an enterprise value close to Musk’s initial $44 billion valuation when he acquired it.
Darsana Capital Partners, which had previously purchased some of X’s debt earlier this year, took part in this equity round, according to some sources. Additionally, the investment firm 1789 Capital, which has supported ventures such as xAI and SpaceX, also contributed, based on insider information.
Officials representing X, Darsana, and 1789 Capital declined to comment on the equity raise.
Musk frequently accesses private markets for financial backing across several of his businesses, including SpaceX, which recently completed a tender offer valuing the enterprise at about $350 billion. Another company, xAI, is purportedly in discussions with investors about raising new funds, estimating its valuation around $75 billion.
Meanwhile, Musk’s entities have seen increased valuations in private markets, although shares of Tesla Inc., his automotive company, have decreased by over 40% this year. This decline partly stems from Musk’s political presence, which has deterred some consumers from buying Tesla vehicles. Increased market competition has also negatively impacted Tesla’s stock value. Recently, Tesla experienced a 5.3% dip in its stock price following the introduction of a new electric car by Chinese automaker BYD Co., which claims its vehicle can charge as rapidly as refueling a gasoline car.
After Musk’s acquisition and renaming of Twitter to X, the company underwent a turbulent period, characterized by significant job cuts and advertiser withdrawals. The advertising sector at X faced challenges after the acquisition, as numerous marketers halted or reduced spending due to concerns about their advertisements appearing alongside inappropriate content.
In response, Musk has pursued legal channels to regain advertisers, suing major brands for withholding ad expenditures, citing anti-competitive behavior. Some advertisers have since resumed partnerships with X, though industry observers speculate that the threat of legal action may influence these decisions. Furthermore, Musk’s influential position within the Trump administration has contributed to marketers’ concerns about maintaining favorable relations with him.
The performance of X has seen recovery following President Donald Trump’s re-election, but it remains a mixed financial landscape. Fidelity Investments, an X investor, nonetheless reduced its valuation of its stake by 68% as of January. Notably, some advertisers have resumed their engagements, and bankers have successfully sold debt that had been retained for years following Musk’s initial purchase.
This article was originally published on Fortune.com.
