How Elon Musk rescued X from the brink

Musk borrowed $13 billion to complete his 2022 take-private of Twitter and the loans quickly went bad

- Lauren Thomas, Alexander Saeedy & Peter Rudegeair

A crowd of investors gathered at Morgan Stanley's New York office to hear X's sales pitch, eager to get a piece of debt that Wall Street had once shunned. Cellphones were a no-go at the January event and the audience was told to stay seated until X Chief Executive Linda Yaccarino and others had left the room after brief remarks—and without taking audience questions.

Banks had planned to sell $3 billion in bonds at 95 cents per dollar, but ended up selling more than $10 billion at even higher prices. It was a testament to X's ability to bring advertisers back to the platform, helped in no small part by owner Elon Musk's proximity to President Trump.

Also underpinning the debt sale was the possibility that X would one day merge with a hotter, ascendant company, Musk's xAI. In private meetings with Wall Street, X executives said there was a good chance that the social-media platform might eventually merge with Musk's artificial-intelligence company, which makes the Grok chatbot.

The billionaire has said he never lost money for investors, but for a long time it looked like he was going to with X. After Musk bought it in 2022, advertisers fled over content-moderation concerns and its loans soured as revenue fell. A month after he took over, Musk said the company—formerly known as Twitter—was on the verge of bankruptcy.

Then, late last month, Musk posted on X that he was merging the company with xAI in a deal that valued the newly combined company at more than $100 billion. Folding X into a larger company competing in a global race to develop sophisticated generative AI tools could open the door to raising money at a valuation considered impossible just a few years ago.

The merger caps a string of events—some strategic, others fortuitous—that helped Musk announce a deal before Trump's tariffs effectively closed the market for deals.