With all the focus on Donald Trump’s “Liberation Day” and his tariffs on everything and everyone, the other great liberation in America hasn’t garnered the attention it deserves: Elon Musk and his co-shareholders in X have also been liberated – or liberated themselves.

Last Friday, in a post on the social media platform, Musk announced that another of his companies, his artificial intelligence start-up, xAI, had acquired X in an all-stock transaction.

The deal, he said, valued xAI at $US80 billion ($127 billion) and X at $US33 billion, excluding its $US12 billion of debt. That would appear to value the combination’s equity at $US113 billion and its enterprise value (equity plus debt) at about $US125 billion.

’Cause I’m free to do what I want any old time: Elon Musk has just liberated himself from his X paper losses.Credit: AP

X (formerly known as Twitter) was acquired by Musk – who contributed about $US26 billion in equity while co-investors put up about $US7 billion – in October 2022, but has struggled ever since, with advertisers fleeing a platform that Musk opened up to a flood of, let’s say, “non-woke” speech.

Revenue plummeted from about $US4.5 billion at the point of acquisition to $US2.7 billion last year.

While Musk did slash the number of X’s workers by about 80 per cent and almost doubled earnings before interest, tax, depreciation and amortisation last year relative to Twitter’s pre-acquisition levels, that barely covered the interest costs on the acquisition debt that he had loaded into the business.

How does a company that one of the world’s biggest investors values at less than $US10 billion come to be valued at $US33 billion today?

The business is still struggling.

© The Sydney Morning Herald