Elon Musk’s social media platform X appears to be recovering financially after suffering a hit to its bottom line the past two years, according to a report.
Wall Street bankers are preparing to sell up to $3 billion of debt holdings in X that have been stuck on their books since 2022, when they helped the Tesla and SpaceX founder acquire the site formerly known as Twitter for $44 billion.
The debt is being pitched to potential buyers with a set of financials showing about $1.2 billion of adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) in 2024, people familiar with the matter told Bloomberg.
Those earnings include roughly $400 million of EBITDA on $710 million of revenue in the final three months of the year – an increase from the previous two quarters, according to the report.
The $1.2 billion figure is about the same as before Musk took over, but the latest financials come with a significant list of adjustments that improve the outlook, according to Bloomberg.
A representative for Musk did not immediately respond to a request for comment.
The company has about $400 million worth of cash on its balance sheet, a steep drop from the $1.4 billion it had in 2022, sources told Bloomberg.
Morgan Stanley bankers have been reaching out to investors ahead of the planned debt sale, The Wall Street Journal reported on Friday.
Other major Wall Street banks, including Bank of America and Barclays, had also issued loans to Musk for the Twitter acquisition.
Banks expect to get 90 to 95 cents on the dollar for more senior holdings, while holding onto junior holdings, the Journal said.
Bankers usually sell such loans soon after the deal is closed, but offloading the X debt has been a challenge since Musk acquired the platform.
In 2023, advertisers fled the platform en masse after Musk reposted another user’s antisemitic post, adding: “You have said the actual truth.”
Some of these advertisers, including Bob Iger’s Disney, resumed ads on the platform last year, even after Musk had told companies that left X to “go f— yourself.”
Now, Amazon is ramping up its spending on X, and Apple, which pulled all of its ad dollars from X in late 2023, has had recent discussions on testing ads on the platform, the Journal reported on Thursday.
Musk’s public image has rebounded as he has grown closer to Donald Trump – donating millions to his presidential campaign, joining him at rallies and speaking at his inauguration. He has been tapped to cut government waste through the newly formed Department of Government Efficiency.
Investors have been reaching out to banks to express their interest in buying the debt, since they believe X’s financials are turning around, according to the Journal.
In an email to staffers earlier this month, Musk acknowledged X’s growing influence.
Mark Zuckerberg, for example, recently followed in Musk’s footsteps when he axed fact-checking policies across Meta platforms.
But Musk said the company’s finances were still a problem.
“Our user growth is stagnant, revenue is unimpressive, and we’re barely breaking even,” he said in the email, which was obtained by the Journal.
In a post on X, Musk said the report is false and that the Journal “is lying.”
