Over the years, billionaire Elon Musk has been instrumental in the founding and funding of many well-known companies. As one of the co-founders of what became PayPal Holdings (NASDAQ: PYPL), Musk received a payout when eBay (NASDAQ: EBAY) acquired the financial technology company in 2002.
A former asset owned by PayPal is in the hands of Musk and has become a recent topic of discussion after the rebranding of Twitter to X.
Musk completed a $44 billion buyout of social media platform Twitter in 2022, a move that was done to help get closer to creating an everything app.
A rebranding to X has been met with mixed reactions from the public and Twitter users but came as part of a history of fascination with the X brand and name for Musk.
In 1999, Musk founded X.com, a financial company he hoped would be a place for banking, checking, credit cards, investments and digital purchases.
X.com merged later with Confinity, a company co-founded by Peter Thiel, and formed what is now PayPal. Reports said Musk wanted to keep the X.com name.
eBay Inc acquired PayPal for $1.5 billion, netting Musk a payout of between $165 million and $180 million according to reports.
The money received went on to help fund the launch of SpaceX in 2002 and an investment in Tesla Inc (NASDAQ: TSLA) by Musk in 2004.
While he was busy running Tesla and SpaceX as their CEOs, Musk still wanted to someday launch an everything app with the name X, a move that is now one step closer with the Twitter buyout and rebrand.
In 2017, Musk acquired the X.com website back from PayPal. The purchase price was not disclosed, but it was said to have been for at least $1 million.
Thanks PayPal for allowing me to buy back https://t.co/bOUOejO16Y! No plans right now, but it has great sentimental value to me.
— Elon Musk (@elonmusk) July 11, 2017
Musk said in a tweet that he didn’t have plans for X.com at the time. Today, the website redirects to X, the social media platform. formerly known as Twitter.
Replies to Musk’s 2017 tweet included his mother Maye Musk sharing X.com coffee mugs and t-shirts. Another user shared an idea that X.com should be “an umbrella website” for all Musk’s companies.
“That’s probably the best use,” Musk replied.
The acquisition of Twitter was well connected to Tesla in 2022 with the share price of the electric vehicle falling on several occasions after filings revealed Musk selling shares to help fund his social media platform purchase.
Musk being the most followed person on Twitter and the Tesla account also having strong reach may have helped with huge customer awareness for a company that doesn’t advertise traditionally like other automakers.
Investors who bought shares of Tesla when Musk acquired X.com have enjoyed strong returns, following alongside Musk as he attempts to lead several companies and create his everything app.
Shares of Tesla traded at a split-adjusted high of $21.20 on July 10, 2017, the day of Musk’s tweet that he had acquired X.com. The purchase date was prior to this, but for this exercise, the day of Musk’s tweet will be used as it marked the first time he publicly acknowledged he had re-acquired the website.
A $1,000 investment in Tesla stock could have purchased 47.17 shares at the time. The $1,000 investment would be worth $10,633.53 today, based on a price of $225.43 for Tesla shares at the time of writing.
This represents a return of 963.4% over the last six years.
For comparison, the same $1,000 invested in the SPDR S&P 500 ETF Trust, which tracks the S&P 500, would be worth $2,012.22 today, representing a return of 101.2%.
If the same investor invested $1,000 in PayPal after the financial technology company sold X.com back to Musk, they would have $1,062.92 today, good for a 6.3% return.
Investors could have also invested the $1,000 in Twitter, which was public at the time. A $1,000 investment in the social media platform would have turned into $2,955.53 based on the buyout price of $54.20 per share by Musk, good for a 195.6% return for investors from the day the X.com purchase was disclosed.
Produced in association with Benzinga