When Elon Musk bought the X for $44 billion in 2022, more than a quarter of that was funded by loans from banks, including Morgan Stanley. Banks usually sell such loans quickly, but in this case, they maintained much of their debt as investors were reluctant to bet on the business of social media company Flounder.
Musk's new power in President Trump's administration has helped change investors' minds.
On Thursday, the bank sold approximately $4.7 billion in X debt. That's over the $3 billion they were originally planning to sell, according to two people familiar with the trade.
Musk, who has become a close adviser to the president and implements government efficiency initiatives, has seen companies that he led, including electric car maker Tesla and rocket company SpaceX, benefit from his position as Mr. I'm faced increasingly wondering whether there is. .
X has become the go-to platform for information about the administration's plans to broadcast Musk to more than 217 million followers of his account. Advertisers were pulled back to X, and those familiar with the deal said they had encouraged a boost to revenue. The company told investors its revenues increased 21% from a month ago, according to a financial knowledge person.
X's spokesman and Morgan Stanley declined to comment. Bloomberg previously reported revenue jumps and details of the transaction.
Debt Sales – totaling $12.5 billion at the time of acquisition, but will help Musk and the bank who have been added for two years. Just two months ago, investors were negotiating at the bank to buy the debt with a loss of 10% to 20%, one person involved in the debate said.
However, investors' appetites have changed dramatically. Last week, the bank sold $5.5 billion in debt to a minority group of investors, said those familiar with the deal. This month, Diameter Capital Partners purchased $1 billion in debt. The bank currently sells almost all of X's debt, leaving around $1 billion on its balance sheet.
Investors were motivated to buy X's debt due to several factors, including improving the company's revenue. Advertisers like Amazon and Apple have returned after fleeing to controversial actions by Musk, three people involved in the debate said.
X's revenues rose 40% last year after the miserable 2023, said someone familiar with the company's finances. Those who are familiar with X's business are more subscribers pay for X's premium services, and Musk's Musk artificial intelligence venture Xai pays X to license their data.
“It looks like more business is coming than in the last two years,” X's content manager Brett Weitz wrote in an internal email in January, seen by The New York Times.
According to internal documents seen by The Times, when they entered the Super Bowl last Sunday, they were expected to win $7.9 million in related ad revenue.
People said the company's extensive cost-cutting measures, including cutting staff by more than 80%, are also appealing to investors.
X's fate has improved, both financially and politically – as Musk is in line with Trump, said three people familiar with the deal.
And those familiar with the deal said they don't expect investors to lend him money and curry favors Musk, but they say he was at the heart of the government. , I brightened up the future of his company. They also said they believe Musk's new role means that the money is likely to be repaid.
Some advertisers who returned to X were worried about the impact they had from advocacy groups recently if they supported the company, said three ad industry executives who were not allowed to publicly talk about the issue. Ta. Others were worried about potential retaliation from Musk if they didn't return.
Last year, Musk sued the global alliance of several big brands and responsible media, a non-profit coalition of major advertisers led by the World Federation of Advertisers, claiming that the group coordinated a boycott against X. . Although filed, Musk continues to press advertisers for his lawsuit. This month, his lawyers added several companies to the case, including Lego, Nestle and Shell.
Musk's connection to the White House can help his other businesses. A few weeks after Trump was elected, Palantir executives sent a note to engineers asking them to use Grok, an AI chatbot designed by Musk's Xai. It was the first time the company asked me to use Grok on other chatbots.
A Palantir spokesperson declined to comment.
Ryan Mac and Sheila Frenkel Reports of contributions.
