When Elon Musk bought X for $ 44 billion in 2022, more than a quarter of this was funded by bank loans including Morgan Stanley. Banks normally sell such loans quickly, but in this case they held most of this debt because investors did not want to bet on the unclear business of the social media company.
Mr. Musk’s new power in President Trump’s administration has helped change the minds of investors.
On Thursday, banks sold approximately $ 4.7 billion of X debt, according to two people familiar with the transaction, more than $ 3 billion they had initially thought to sell.
Mr. Musk, who has become a close adviser to the president and is developing a government efficiency initiative, has faced increasing questions if the companies he runs – including the Tesla Electrician and Rocket Spacex Company – are benefiting from the position of his as mr mr as mr. Trump’s right man.
X has become a platform for information on administration plans, which Mr. Musk transmits to his account more than 217 million followers. Advertisers have returned to the Droves on the X, people familiar with the deals said, promoting an increase in income. The company told investors that its revenues in December increased 21 percent a month ago, said one person with knowledge of finances.
An X and Morgan Stanley spokesman refused to comment. Bloomberg previously reported income jump and transaction details.
Debt sale – which reached $ 12.5 billion at the time of purchase – helps Mr. Musk and banks, which have been saddened with it for two years. Just two months ago, investors are negotiating to buy that debt at a loss of 10 percent in 20 percent for banks, said one person involved in the discussions.
But the investor appetite has been drastically shifted. Last week, banks sold $ 5.5 billion debt for a small group of investors, people familiar with the transaction said. This month, capital partners with diameter bought $ 1 billion of debt. Banks have now sold almost all of their X debt, leaving approximately $ 1 billion in their balances.
Investors were motivated to buy the X debt due to several factors, including improving the company’s revenue. Advertisers like Amazon and Apple have returned after they have left for controversial actions by Mr. Musk, three of the people involved in the discussions said.
X revenue increased 40 percent last year after a shameful 2023, the person acquainted with the company’s finances. More subscribers are paying for the X Premium Service, and the artificial intelligence enterprise of Mr. Musk, Xai, pays X to license his data, said people familiar with X business.
“More business seems to be coming than it has in the last two years,” wrote Brett Weitz, head of X content, in an internal email in January, which was seen by the New York Times.
Entering the Super Bowl last Sunday, the company settled to earn $ 7.9 million in relevant advertising, exceeding its $ 7.2 million from the 2024 event, according to a first internal document by Times.
The company’s extensive cost reducing measures, including reducing staff by more than 80 percent, have also appealed to investors, people said.
X assets – both financially and politically – have improved after Mr. Musk has lined up with Mr. Trump, three people familiar with the transaction said.
And while people familiar with the deal said that investors did not expect to spare Mr. Musk’s favor by lending money, they saw the future of his companies as brighter now that he was in the heart of the government. They also said they believed that Mr. Musk’s new role meant that the money was more likely to return.
Some advertisers who returned to the X have recently been concerned about the consequences of advocacy groups if they support the company, said three leaders of the advertising industry who were not authorized to speak publicly on the matter. Others were concerned about the possible punishment by Mr. Musk if they did not return.
Last year, Mr. Musk sued some major brands and the global alliance for responsible media, a nonprofit coalition of large advertisers led by the World Federation of Advertisers, claiming the group had orchestrated a boycott against X. Garm closed day after It was the lawsuit after the lawsuit was filed, but Mr. Musk continued to crush his case against advertisers. This month, his lawyers added several companies to the case, including Lego, Nestlé and Shell.
Mr Musk’s connections to the White House can help his other businesses. Weeks after being elected, Mr. Trump, leaders in Parantir sent a memorandum to engineers, demanding that they use exclusively Grok, a chatbot designed by Mr. Musk’s Xai, two employees of Parantir said. It was the first time the company had asked them to use Grok on other chatbots.
A Parantir spokeswoman refused to comment.
Ryan mac AND Sheera Frankel Contributed Reporting.