Elon Musk would be the largest beneficiary of Donald Trump’s re-election, surpassing even Trump himself.
Based on a brand new report from Bloomberg, Musk’s social media platform X is at the moment trying to elevate cash from traders at a valuation of $44 billion. If that quantity sounds acquainted, it is as a result of that is exactly what Musk paid for the corporate previously referred to as Twitter when he acquired it in October 2022.
Within the years since Musk took over and rebranded the whole platform as X, its income has plummeted by practically half of what it made as Twitter. That is billions of {dollars} in misplaced income.
Musk, alongside his monetary backers, now appears to have overpaid for the corporate. One investor, Constancy, calculated in September of final yr that its funding had misplaced 79 p.c of its worth in comparison with when Musk acquired it.
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Nonetheless, the U.S. presidential election modified the sport. Musk threw his help behind Trump, establishing a PAC to again the Republican candidate with a whole lot of tens of millions of {dollars}. That funding paid off when Trump gained. Now, Trump has appointed Musk to supervise the Division of Authorities Effectivity (DOGE), granting him vital affect over federal spending.
Musk’s firms, together with Tesla and SpaceX, have secured billions of {dollars} in authorities funding over time. Nonetheless, his shut relationship with President Trump is now benefiting his companies in methods past authorities contracts.
Since Musk took over X, the platform has seen a major loss in advertisers resulting from content material points and a few of Musk’s personal controversial statements. However, after the election, some advertisers have signaled their return. Whereas it is unclear how a lot they’re going to spend in comparison with earlier campaigns, notable manufacturers like Apple have begun operating advertisements on X for the primary time in years.
Moreover, some traders in Musk’s X, who had been struggling to dump their debt, just lately discovered success. Bloomberg studies that some had been in a position to offload billions of {dollars} of this debt at “no low cost to face worth,” which means they probably acquired again most if not all of what they put in.
With X getting ready to allow monetary transactions on the platform and combine Musk’s AI firm, xAI, and its Grok chatbot, the corporate is now looking for funds on the identical $44 billion valuation Musk initially “overpaid.” Because of Trump’s election, Musk is now in a stronger place to boost the mandatory capital.
