When Elon Musk bought the X for $ 44 billion in 2022, more than a quarter of it was funded by banks, such as Morgan Stanley. Banks usually sell such loans quickly, but in this case they kept much of this debt because investors were reluctant to bet on the social media business.
Mr Musk’s new power in President Trump’s administration has helped to change the minds of investors.
On Thursday, banks sold about $ 4.7 billion from X’s debt, according to two people familiar with the transaction, more than the $ 3 billion they initially intended to sell.
Mr Musk, who has become a close adviser to the president and manages a government efficiency initiative, has addressed growing questions about whether the companies that are driving – including the Tesla electric automotive and the Rocket Company Spacex – benefit from his position as MR as MR .
The X has become a platform for information on administration plans, which Mr Musk broadcasts to more than 217 million fans of his account. Advertisers returned to Droves on X, reported people who are familiar with the deals, fueling a revenue boost. The company told investors that its revenue in December increased by 21 % from a month earlier, a person with finances was aware of.
An X spokesman and Morgan Stanley refused to comment. Bloomberg previously mentioned the jump in the revenue and details of the transaction.
The sale of debt – which amounted to $ 12.5 billion at the time of the acquisition – helps Mr Musk and the banks, which have been imposed with it for two years. Just two months ago, investors were negotiating to buy this debt with a loss of 10 % to 20 % for banks, one person said in the discussions.
But investment appetite has been drastically shifted. Last week, banks sold $ 5.5 billion in debt to a small group of investors, people who were familiar with the transaction said. This month, Diameter Capital Partners bought $ 1 billion in debt. Banks have now sold almost all their debt X, leaving about $ 1 billion for their balance sheets.
Investors were incentives to buy X’s debt due to many factors, including improved revenue of the company. Advertisers such as Amazon and Apple returned after leaving controversial actions by Mr Musk, three of the people who participated in the discussions said.
X’s revenue increased by 40 % last year after a sad 2023, the person who is familiar with the company’s finances said. More subscribers pay for X’s premium service and Mr Musk’s artificial Intellignal Venture, Xai, pays X to grant permission to use his data, according to people who are familiar with X.
“More businesses seem to come than in the last two years,” writes Brett Weitz, head of X content, in an internal email in January, considered by the New York Times.
Going to the Super Bowl last Sunday, the company is expected to earn $ 7.9 million in related advertising revenue, slightly more than $ 7.2 million from the event in 2024, according to an internal document seen by Times.
Extensive measures to reduce the cost of the company, including reduced staff by more than 80 %, have also turned to investors, people said.
X’s property – both economically and politically – have improved as Mr Musk has been in line with Mr Trump, three people who are familiar with the transaction said.
And while people who were familiar with the agreement said that investors did not expect to cover up with Mr Musk, lending his money, saw the future of his companies as brighter now that he was at the center of the government. They also said that they believed that Mr Musk’s new role meant that money was more likely to be returned.
Some advertisers who returned to X recently worried about the impact of the defense teams if they supported the company, said three advertising industry executives who had not been authorized to speak publicly about the matter. Others were concerned about the possible compensation by Mr Musk if they did not return.
Last year, Mr Musk sued several big brands and the world alliance for responsible means, a non -profit coalition of large advertisers led by the World Advertiser Federation, arguing that the team had orchestrated a boyfriend. It was registered, but Mr Musk continued to push his case against advertisers. This month, his lawyers added several companies to the case, including Lego, Nestlé and Shell.
Mr Musk’s ties with the White House could help his other businesses. Weeks after Mr Trump’s election, Palantir executives sent a note to the engineers, asking to use Grok exclusively, an AI Chatbot designed by Mr Musk’s XAI, two Palantir employees. It was the first time the company asked them to use Grok over other chatbots.
A Palantir spokesman refused to comment.
Ryan mac and Sheera Frenkel They contributed reports.
