The world’s richest man Elon Musk has sold his social media company X (formerly Twitter). X has been bought by Elon Musk’s other company xAI. The sale of X has not happened just like that. Ever since Elon Musk bought X, he has suffered a loss of Rs 94000 crore.
Musk buys Twitter in 2022 for $44 billion. Elon Musk wrote in a post on X, ‘In this deal, the valuation of xAI is $80 billion and the valuation of X is $33 billion.’ He also told that X also has a debt of $12 billion. Including this debt, the valuation of X becomes $45 billion. This deal was done entirely in stock. This means that xAI has given its shares to buy X. Morgan Stanley was the sole banker in this deal. They represented both the parties.
Recently, the valuation of X has increased by more than 70%. But according to a post by Elon Musk, its total value is around $45 billion. According to Elon Musk’s post, the valuation of X in this deal has been estimated at $33 billion. This also includes a debt of $12 billion.
Musk bought Twitter (now X) for $44 billion in the year 2022. This means that he has suffered a loss of about $11 billion (about Rs 94000 crore), even though the debt of $12 billion is still pending. In such a situation, the question arises why did he make a loss-making deal?
Recently, a report by Benzinga talked about improvement in the valuation of X after the fall. Financial Express has quoted the report as saying that Fidelity had reduced the value of X by 72% by December 2024. According to the report, X’s valuation dropped to $12 billion after Musk’s acquisition in 2022, but it later rose to $44 billion.