Elon Musk’s ₹94,000 Crore Loss on X: Why Did He Sell It?

The world's richest man Elon Musk has sold his social media company X (earlier 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 bought Twitter for $44 billion in 2022.

Elon Musk wrote in a post on X, 'In this agreement, 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 is done entirely in stock. This means that xAI has given its shares to buy X. Morgan Stanley was the only banker in this deal. He represented both the parties.

Did Musk make a loss deal?

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 is estimated at $ 33 billion. This also includes a debt of $ 12 billion.

Musk bought Twitter (now X) in the year 2022 for $ 44 billion. 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 that why did he make a loss-making deal? Is he using another company to save one company?

X's value had fallen

Recently, a report by Benzinga talked about improvement after the fall in X's valuation. Financial Express, citing the report, has reported that Fidelity had reduced X's value by 72% by December 2024. According to the report, after Musk's acquisition in 2022, X's valuation had fallen to $12 billion, but later it reached $44 billion.

Musk got a setback, but...

After Musk's acquisition in 2022, X suffered the biggest setback when advertisers left this social media platform. However, this is not the case now. Apple, Disney and many other advertisers are coming back with X.

Musk introduced the option to pay for blue tick and Grok also contributed to the company's profits. Musk and Donald Trump were together during the US elections. Trump's victory in the election was also a boon for X. It is believed that if the value of X falls, Trump may again stand with X. Just like he stood with Musk's company Tesla.