In a stunning reversal of fortunes, Elon Musk’s ownership of X (formerly Twitter) has brought the company back to the brink of a $44 billion valuation—close to what he paid for it in October 2022. After a chaotic two and a half years under Musk’s leadership, which drove the platform into turmoil and sent its ad business and valuation plummeting, X is now showing signs of recovery. A recent Bloomberg report revealed that X is in talks to raise funds at a valuation of $44 billion, though the negotiations are ongoing and may still fall apart. Despite these uncertainties, the platform’s recent momentum is undeniable, with major advertisers like Amazon and Apple returning to the platform, and bondholders managing to sell portions of X’s debt at nearly full value.
The turnaround is particularly surprising given the rocky path X has traversed since Musk’s acquisition. After taking over, Musk implemented sweeping changes that alienated advertisers and users alike. He slashed the workforce by 80%, reinstated controversial accounts, including those of white supremacists and conspiracy theorists, and revamped policies in ways that made moderation more challenging. The platform’s reputation suffered further as hate speech surged, and high-profile incidents, such as ads appearing alongside pro-Nazi content, led many advertisers to abandon ship. Yet, in recent months, Musk’s efforts to stabilize the platform and court advertisers back seem to be paying off. The return of major brands like Amazon and Apple signals a cautious optimism about X’s direction, even as questions linger about its long-term viability.
One key factor in X’s rebound is Musk himself. His influence and willingness to take risks have always been double-edged swords, but in this case, they’ve driven significant attention and activity on the platform. Musk’s explicit support for former President Donald Trump has been particularly impactful. Since Trump’s return to the White House, X has become a central hub for updates and interactions with the administration, making it indispensable for political news and real-time discussions. Musk has also used the platform to promote his own initiatives, such as his role in the Trump administration’s Department of Government Efficiency. Wedbush analyst Dan Ives even suggested that Trump’s reelection effectively doubled X’s valuation, underscoring how deeply intertwined Musk’s personal brand and political connections are with the platform’s success.
Despite these gains, X’s path forward remains uncertain. When Musk first acquired Twitter, he envisioned transforming it into a multi-purpose “everything app” akin to China’s Weibo and WeChat, offering services like payments, e-commerce, and entertainment alongside social media. While X has made some strides, such as a recent partnership with Visa to offer digital wallets, it’s still far from realizing Musk’s ambitious vision. Trust issues persist among users and advertisers, exacerbated by the company’s inconsistent moderation and Musk’s polarizing behavior. For instance, his public feuds with advertisers, including a notable confrontation with Disney CEO Bob Iger, have left a lasting impression on the company’s reputation.
Moreover, X’s financial health is difficult to assess since Musk took the company private, eliminating the need to disclose detailed financial results. Analysts like D.A. Davidson’s Gil Luria have speculated that Musk’s aggressive cost-cutting measures may have improved X’s profitability, but without concrete data, these claims remain speculative. The return of big advertisers like Amazon and Apple may also be driven by broader political strategies to align with the Trump administration rather than a genuine confidence in X’s stability. As such, the platform’s recovery feels fragile, with advertisers potentially biding their time to see how the political and economic landscape evolves.
Looking ahead, X faces significant challenges in maintaining its momentum. The rise of competitors like TikTok and upstart platforms mimicking Twitter’s original design has increased competition in the social media space. Additionally, the resurgence of hate speech and extremism under Musk’s leadership continues to cast a shadow over the platform’s future. Despite these obstacles, it’s remarkable that Musk has managed to salvage a company that many believed was on the brink of collapse. Whether this recovery is sustainable, however, remains to be seen. For now, X’s story is one of unexpected resilience, driven by the unconventional leadership of its controversial CEO and the unpredictable political climate in which it operates.
