The value of Elon Musk’s social media platform, X, has reportedly soared back to the $44bn he paid for it, in a dramatic reversal of fortunes since the billionaire became a key ally of Donald Trump.

Investors valued the site formerly known as Twitter at $44bn (£33.9bn) in a secondary deal earlier this month, in which they exchange existing stakes in the company, according to a Financial Times report.

X, which is also working on raising $2bn in fresh capital in a primary funding round selling new equity to pay off more than $1bn in junior debt, had been valued at just $10bn by the existing investor Fidelity Investments as recently as late September.

Musk, the world’s richest man, took control of what was then Twitter in October 2022 and subsequently tweeted “the bird is free”, in a reference to its corporate logo. The following summer he rebranded the platform as X.

Since taking over, Musk has loosened the site’s moderation policies, which prompted many advertisers to pause or leave. Musk subsequently said advertisers were trying to “blackmail” him with boycotts and hit out in a profanity-laced outburst in a session at the New York Times DealBook Summit in November 2023.

X subsequently sued a global advertising alliance and several big companies, including Unilever, Mars and CVS Health, accusing them of unlawfully conspiring to shun the social network and intentionally causing it to lose revenue.

“We tried peace for 2 years, now it is war,” Musk tweeted after the launch of the legal action.

The new $44bn valuation represents a remarkable turnaround for the platform and its investors, which include Andreessen Horowitz, Sequoia Capital, 8VC, Goanna Capital and Fidelity Investments. The secondary deal will set a price for the primary fund raise of $2bn.

Institutions that provided loans to help fund Musk’s X takeover also received a boost after Musk gave a 25% stake in his artificial intelligence start-up, xAI, to them early last year.

Since then, xAI has obtained a valuation of $45bn, providing new security to lenders, which has also boosted the updated valuation of X.

Revenues at the social media platform have fallen since Musk’s takeover but it posted adjusted profits of $1.2bn last year.

It emerged this week that Musk’s vast stake in Tesla is no longer the most valuable asset in his business empire, with the electric car company’s market value continuing to fall as investors sell off stock and customers turned away in disgust at his politics.

Musk’s stake in SpaceX, his private rockets and satellites business, is now the tycoon’s largest asset for the first time in five years, according to Forbes.

Forbes still estimates his net worth at $323bn, with Musk’s SpaceX stake worth an estimated $147bn, about $20bn more than his shares in Tesla after the carmaker’s shares halved since December.