By Cliff Montgomery – May 30th, 2025
Part one of this article reveals basic truths of Trump’s and Musk’s business practices.
Elon Musk “is someone who promotes and appears to relish misinformation and hyperbole on a mass scale,” declared a 2024 CNN article.
The fairly recent claims about the sudden “financial turnaround” at X have just that kind of feel about them. The company had lost much of its valuation under Musk’s tenure. Last fall, Fidelity Investments released estimates declaring that the shares of X it owned had lost nearly 80 percent of their value under Musk’s ownership and direction. At the time, this appeared to indicate that the social media site’s value had dropped to a mere $9.4 billion.
And in January, the Wall Street Journal obtained an email apparently written by Musk at that time and sent to X staff that admitted, “our user growth is stagnant, revenue is unimpressive, and we’re barely breaking even.”
Musk denies having sent the message. However, the news source The Verge says it has confirmed the email was from Musk.
Yet by the middle of March – roughly a mere two months later – Musk touted that X somehow had miraculously regained all of its valuation, and was now worth as much as it was when he bought it in 2022. At purchase, the social media site was valued at $ 44 billion.
But the recent rise in the company’s valuation appears to come down, in great part, to old-fashioned accounting sleights-of-hand.
For instance, the gain in valuation was greatly aided by legal – but potentially misleading – accounting practices, chief among them a recent restructuring of the debt Musk had accumulated during the purchase of the social media site.
Though Musk is now publicly touting a fresh valuation of $44 billion, he tacitly admitted in an X post that the debt restructure allowed him to write off roughly $12 billion of debts as paper assets. He also declared in the same post that the value of the company minus the restructured debt is $32 billion – substantially less then he paid for the social media site a few years ago.
Recently folding X into his A.I. company, xAI, Musk wrote on the social media platform (and apparently rounding up his numbers) that:
“@xAI has acquired @X in an all-stock transaction. The combination values xAI at $80 billion and X at $33 billion ($45B less $12B debt).”
And the evidence trail gets even deeper …
At least one source declared to Financial Times that the recent upswing in X’s valuation was partly thanks to earnings figures that were “wildly adjusted.”
This assessment appears to be buttressed by an article printed by the news source Tech Central, which stated that “the latest figures [on X] come with a significant list of adjustments that help boost the numbers.”
Expectations of actual profits are lowered even more when one remembers the real-world effect of those outstanding debts.
“As part of taking on these loans,” Social Media Today pointed out in January, “Musk also loaded X with a cumulative debt burden of around $1.2 billion in interest payments per year.”
That figure “is exactly the amount that Bloomberg’s reporting suggests the company brought in [last year],” Social Media Today further stated. Said another way, the annual interest on all that debt swallowed up any potential monetary gains made last year.
“Which likely suggests that X made no money at all in 2024,” deftly noted Social Media Today. “Even with Musk cutting 80% of its staff, and slashing costs wherever he can.”
This tendency to lower expectations after providing sweeping claims and a lot of chaos followed Musk into government. Musk at first made the somewhat ridiculous, grandiose claim that DOGE was going to wipe around $2 trillion of investment in people and in infrastructure from the federal budget (such investments are what conservatives always refer to as “wasteful spending”). But now finally being forced to produce tangible results, he had no choice but to adjust his claims on numerous occasions – downgrading the claim to a potential $1 trillion cut in “wasteful government spending,” until finally reaching a much smaller sum of about $160 billion.
That seems to be Musk’s way, which is much like the way of his friend Trump. Start with grandiose claims, create genuine touches of theater – anyone remember Musk with his pristine, chromed, spiked chainsaw, slashing ‘government waste’? – then finish the dismount with a whimper of under-performance and unfulfilled promises.
The final point? It’s highly doubtful that two men who base their much-touted riches on a bed of lies, smoke, mirrors and confidence games will save money for anyone but themselves. They certainly understand con jobs and puffed-up claims based on nothing – but they don’t seem to practice many legitimate business activities. Maybe that’s why U.S. bureaus now are so desperately under-funded and federal departments are struggling to remain effective.
The legacy of Trump, Musk and DOGE? Hubris and a thirst for personal profit via tax kickbacks, at the expense of our people and our country. Their weakness and incompetence hasn’t really produced anything else.
