Elon Musk could emerge as a major beneficiary of Donald Trump’s potential re-election, potentially surpassing even Trump himself.
Recent reports indicate that Musk’s social media platform, X, is currently aiming to raise funds from investors with a valuation of $44 billion. This figure mirrors the amount Musk paid for the platform, formerly known as Twitter, when he acquired it in October 2022.
Since Musk’s takeover and the subsequent rebranding to X, the platform’s revenue has declined by nearly 50% compared to its earnings as Twitter, translating to billions in lost revenue.
Musk and his financial partners may have overvalued the company; one investor noted a staggering 79% decline in their investment’s value since Musk’s acquisition.
However, the dynamics shifted with the U.S. presidential election. Musk publicly backed Trump and established a political action committee to support the Republican candidate with hundreds of millions of dollars. This investment paid off when Trump emerged victorious. Following the election, Trump appointed Musk to oversee the Department of Government Efficiency (DOGE), granting him considerable influence over federal spending.
Musk’s companies, including Tesla and SpaceX, have historically secured billions in government funding. Now, his rapport with Trump is translating into more benefits for his businesses beyond government contracts.
Since Musk assumed control of X, the platform has experienced a notable decline in advertising revenue due to content issues and some of Musk’s own controversial remarks. Nevertheless, in the wake of the election, certain advertisers have indicated plans to return. While the extent of their investment remains uncertain, major brands like Apple have resumed advertising on X for the first time in years.
Additionally, some investors in Musk’s X who previously faced challenges in selling off their debt have recently found success. Reports suggest that many managed to unload billions of dollars of debt without a discount, indicating they likely recovered most, if not all, of their original investment.
As X prepares to enable financial transactions and integrate Musk’s AI company, xAI, alongside its Grok chatbot, the platform is seeking to raise funds at the same $44 billion valuation Musk initially paid. Following Trump’s re-election, Musk appears better positioned to gather the necessary capital to support this endeavor.
