Elon Musk sells X to his own xAI for $33 billion in all-stock deal
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xAI has raised maybe $12B from investors. And, supposedly, makes $100M/yr.
The valuations are absurd.
"Makes" by selling what exactly?
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I don't understand how this gets him free of the loans. My understanding is that he financed $14B of the Twitter purchase with loans secured against Tesla stock. That $14B worth of twitter stock was then owned by Musk and he also had a loan.
This was an all stock purchase, so xAI stock was exchanged for equivalent value of Twitter stock (keep the old name to keep it clear). Now Musk's twitter stock that he bought with the $14B will become the equivalent value of xAI stock, and he still has the loan that bought it in the first place.
Unless $14B of stock has been sold somewhere to repay the loans they still exist.
To know how exactly it works, we'd need to know details that aren't public.
But just speculating, if the creditors value the combined xAI+X higher than just X, then there is room to transfer the loan to the new company and away from Tesla.
But whatever the details are, Elon isn't an idiot when it comes to money. He definitely has advisors who cooked up the optimal way to profit from the AI hype.
And the essence of that is that Tesla shareholders will be left holding the bag, while Elon utiizes X/xAI to capitalize on the hype.
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"Makes" by selling what exactly?
Subscriptions and licensing, supposedly.
$12B is just how much money investors put into it. The company’s valuation is $80B. Which is insane.
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Is this so the loans secured with X stock can't be called in, forcing Elon to sell the collateral to pay back the loan?
Sure seems like a bullshit business move to retain control of Tesla.
X is a private company, there's no stock.
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For reference, he bought it for $44B.
https://wikipedia.org/wiki/Acquisition_of_Twitter_by_Elon_Musk
YAAASSSS!! I love to think of him losing money without money his influence plummets
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The combination values xAI at $80 billion and X at $33 billion ($45B less $12B debt)
Lol, he actually think the value of Shitter is still $45B, as when he bought it. That's cute.
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The combination values xAI at $80 billion and X at $33 billion ($45B less $12B debt)
Lol, he actually think the value of Shitter is still $45B, as when he bought it. That's cute.
If I recall, fidelity wrote off most of its investment in twitter less than a year after the acquisition: https://www.forbes.com/sites/tylerroush/2024/09/30/elon-musks-x-is-now-worth-around-a-fifth-of-the-44-billion-he-paid-for-it-fidelity-says/
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The whole point of buying Twitter was to take it private. IPO for xAI would hilariously undo that.
The point was to win an election.
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So what is he planning on doing? Make the worlds most corrupt porn Ai service?
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Coincidence? I think not!
Omg I just realized 88 is also how old his melting body looks.
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That's how I've been pronouncing it in my head when I read it.
I still say "Twitter" though because that and the gulf of Mexico are the only things I feel are okay to deadname.
I've always pronounced it gzitter
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So what is he planning on doing? Make the worlds most corrupt porn Ai service?
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If I recall, fidelity wrote off most of its investment in twitter less than a year after the acquisition: https://www.forbes.com/sites/tylerroush/2024/09/30/elon-musks-x-is-now-worth-around-a-fifth-of-the-44-billion-he-paid-for-it-fidelity-says/
Wrote down not off.
https://www.theguardian.com/technology/2024/jan/02/x-twitter-stock-falls-elon-musk
Debt is written off when deemed unrecoverable.
Assets can be written down when the value is lower than expected. Often this is due to more rapid depreciation of capital assets due to damage or impairments to goodwill (brand failure).
But none of that matters because private equity valuations are all bullshit and mean nothing anyways.
https://www.wallstreetoasis.com/forum/private-equity/private-equity-is-a-joke
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So... computer programs can now own property. Interesting. Is this the first step in giving computers the vote?
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YAAASSSS!! I love to think of him losing money without money his influence plummets
It's almost better than losing money. He put up a certain amount of Tesla stock as collateral for the loan (essentially) to buy Twitter.
So if Tesla's stock tanks, those creditors will be able to claw more stock away from him. If it tanks enough, he's in hostile takeover territory.
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It's almost better than losing money. He put up a certain amount of Tesla stock as collateral for the loan (essentially) to buy Twitter.
So if Tesla's stock tanks, those creditors will be able to claw more stock away from him. If it tanks enough, he's in hostile takeover territory.
I love it when you talk dirty 🤪
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He called the tesla models S3XY, and the 3 is only because Ford was gonna sue him if he used E.
Next one will be the Tesla Model 80085..
