In 2022, Elon Musk took Twitter private because public markets, he argued, could not appreciate its long-term vision. Four years later, Twitter\u2014or rather X\u2014has returned to public markets. Not through its own IPO. Not because it became profitable. But because it has been folded into one of the world\u2019s most valuable private companies, SpaceX, which went public earlier this month.<\/p>\n
Ordinarily, when a company returns to public investors after years in private hands, investors get to value that company and decide whether its turnaround succeeded or failed. In X\u2019s case, that moment never arrived. Instead, the company disappeared into xAI, and xAI disappeared into SpaceX.<\/p>\n
This is not the first time markets have seen unrelated or weak businesses packaged with stronger ones. Bankers have long understood that difficult assets become easier to sell when they are pooled with better ones. Mortgage-backed securities worked on precisely that intuition: investors bought the pool rather than each underlying loan. Corporate finance has its own version. Combine an underperforming business with an exceptional one, encourage investors to value the package rather than its constituent parts, allowing the weaker asset to acquire a valuation it might never have commanded on its own.<\/p>\n
\t\t\t\t\tShow Full Article<\/p>\n
Folding an underperforming, founder-controlled social media platform into one of the world\u2019s most valued space and satellite companies has important governance implications for the shareholders of SpaceX and the consumers of X, arguably the world\u2019s most influential social media platform.<\/p>\n
The promise to revive Twitter<\/p>\n
After Musk bought Twitter promising to revive its fortunes, he overhauled the product, renamed it X, introduced paid features, restricted previously free functionalities and repeatedly assured users and investors that a turnaround was underway. Yet, X emerged as a platform that many users found to be more expensive and far less enjoyable, even as its financial performance remained under a cloud. As the user experience deteriorated due to the type of content promoted on the platform and glitches with the interface, millions of users left the platform. Instead of demonstrating that X could once again stand on its own, Musk has chosen to bundle it with SpaceX.<\/p>\n
The chronology is instructive: Musk acquired Twitter for roughly $44 billion in 2022 and took it private. Over the next few years, advertising revenues reportedly fell sharply, the company underwent repeated restructuring, banks struggled to syndicate acquisition debt, and Musk continued to promise that profitability was around the corner. In 2025, X was merged into xAI. From that point on, X effectively ceased to exist as a separately observable business. In 2026, xAI itself was merged into SpaceX.<\/p>\n
Twitter generated over $5 billion of revenue before Musk acquired it. By 2023, while audited financial statements were no longer available, industry estimates suggested revenues had fallen to roughly $3.4 billion. In 2024, Fidelity \u2014 a key institutional shareholder in Twitter \u2014 had repeatedly marked down its investment until it implied a valuation close to 20 per cent of Musk\u2019s purchase price. By 2025, when it was merged with xAI, valuing the social media platform by itself became almost impossible.<\/p>\n
SpaceX\u2019s filing too does not disclose X\u2019s financial performance separately. Instead, it aggregates X with Grok, enterprise AI offerings, subscriptions, APIs and data licensing into a single AI segment.<\/p>\n
Who bailed out X?<\/p>\n
Conglomerates have long argued that combining businesses creates economies of scale, scope and capital allocation efficiencies. This is the fundamental logic of corporate mergers and restructuring, which allows both the creation and re-distribution of value. SpaceX bundles a range of businesses including launching rockets, providing wireless connectivity through space satellites, building AI data centers in space, training foundational AI models, and also running the social media platform, X.<\/p>\n
The bundling of unrelated businesses tends to raise questions about the value associated with the bundled business verticals. In particular, bundling X with SpaceX stands out because, unlike the typical public merger, both X and SpaceX are substantially founder-owned.\u00a0 This gives it much more of a bail-out flavour. Had SpaceX acquired X from an unrelated seller, the transaction would have been negotiated at arm\u2019s length and investors could have judged whether SpaceX overpaid. But common-control mergers work differently. Because the same controller sits on both sides of the transaction, there is no independent market price against which outsiders can evaluate the exchange. That makes disclosure far more important.<\/p>\n
Given the absence of standalone financial disclosures and the resulting opacity around the value that each business brings to the table, the jury is out on whether the public shareholders of SpaceX, in effect, subsidised the owners of X.<\/p>\n
Can X remain an independent public square?<\/p>\n
Elon Musk\u2019s acquisition of Twitter has always posed a key governance question for the social media platform: to what extent are X\u2019s moderation policies influenced by Elon Musk\u2019s personal preferences or his other financial interests. The bundling of X into SpaceX intensifies this governance conflict.<\/p>\n
Twitter and X built their reputation as a platform for unconstrained speech and scepticism of government power. SpaceX, by contrast, depends heavily on government contracts, licences, security clearances and regulatory approvals. One business historically claimed to challenge governments; the other depends on maintaining close relationships with them. Whether those incentives can comfortably coexist within a single listed company has received remarkably little attention.<\/p>\n
Overselling founder-led eco-systems<\/p>\n