Summary
Elon Musk announced that his AI startup xAI has merged with his social media platform X in an all-stock deal, valuing xAI at $80 billion and X at $33 billion.
Musk stated the merger will combine AI expertise with X’s broad reach.
xAI, launched less than two years ago, competes with OpenAI and has developed the Grok chatbot, integrated with X.
why does this feel like a twitter bailout. so he gets to shuffle the financial deck of these 2 so twitter isnt a complete failure monetarily?
yes, he uses the hype investor cash that poured into the ai boondogle to cover his insane twitter purchase and literally bail himself out of his stupidity
You need another property. Work a shady deal with a bank to massively overvalue that property. Borrow against that equity.
“Well what do I do with an overvalued loan on my other property now?” I hear you ask. Simple! Have another another property. Work a shady deal to massively overvalue…
It’s not a xhitter bailout. It’s a robbery of shareholder investment.
If he wants to use xhitter content for grok, that’s gonna be most fucked up LLM of all.
Hmm…
Manipulating stocks between companies you own for fun and profit…
Sounds pretty Ferengi to me.
And no accountings shall be held…
🙄 🤡 🤦♀️ 🖕
Two companies no one wanted now one company no one wants.
Company worthless? Sell it to yourself for a ludicrous cost to increase your market value!
You mad, wage slaves?
Then immediately borrow real money against the paper value of your new merger company. Pocket a few billion and use some to bribe the feds to not audit you.
It’s crime all the way down.
valuing xAI at $80 billion and X at $33 billion
Market cap of Twitter was $41B, Musk overpaid at $44B,
Fidelity valued it at $9.4B late last year.
xAI paid $33B for it this year.
So this is a significantly worse overpay.
Musk overpaid at $44B,
Yes, but about $14 billion was financed by debt rather than shares of stock, so the market cap immediately dropped to $30B as a result (enterprise value is market cap + outstanding debt because in a liquidation the debt would be paid out of the assets before the shareholders get anything). So in a sense, the current shares were worth about $30B at the time of the 2022 transaction.
If this new merger is a private transaction that values X at $33B and xAI at $80B, and everyone agrees, it’s functionally the same as if it were worth $3.3B and $8B.
