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xAI has acquired X, xAI now valued at $80B

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Re: xAI has acquired X, xAI now valued at $80B

#441

Post by gwern »

lapcat wrote: post #88

There must be some connection between this and the new equity funding last week, I would think? March 19: "Elon Musk’s social network X has raised close to $1 billion in new equity from investors" "Musk himself participated in the equity raise" "The deal values X’s equity at roughly $32 billion." https://fortune.com/2025/03/19/elon-musk-x-twitter-equity-fu...

If nothing else, you want to do this merger after the check clears from some new investors, for two reasons: it provides a high valuation you can use to minimize the wasted equity, and because it is highly dilutive of X.ai shareholders to transfer a lot of their equity to a Twitter which is not remotely worth $44b, you want all shareholders in before you soak them in the merger, rather than after, when they can bail or demand revised terms which reflect the actual low value of Twitter now dragging down X.ai.

Re: xAI has acquired X, xAI now valued at $80B

#442

Post by electriclove »

HarHarVeryFunny wrote: post #417

Seems to me he's just scammed xAI investors, who thought they were investing in an AI company, into bailing him out of his failed Twitter purchase - they are now the idiots who paid $44B for Twitter (recently valued by Fidelity at $10B), and Musk gets his money back.

These xAI investors are not regular paycheck people. If they aren’t happy, this deal would not have happened. If they lose money, who cares.

Re: xAI has acquired X, xAI now valued at $80B

#443

Post by jfengel »

miohtama wrote: post #163
Workaccount2 wrote: post #160

Earlier quoted context omitted.

Trump pardoned Trevor Milton today, who scammed investors out of millions doing things like his now infamous "rolling a truck down a hill to make it looks functional" demo. Milton donated $1.8M to Trump, and Miltons lawyer's sister is Pam Bondi, the Attorney General. This is nakedly corrupt and a strong signal that you can get away with all manner of financial fuckery if you are on Trumps "good list".

Every democratic country deserves the government they get.

Good and hard.

Re: xAI has acquired X, xAI now valued at $80B

#444

Post by willy_k »

User23 wrote: post #412
KerrAvon wrote: post #318

Earlier quoted context omitted.

On what basis do you think 2028 elections will be free and fair? Congress is going to try to mass-disenfranchise women before the 2026 midterms. They've stated this on the record. Dems aren't going to gain control of congress in the upcoming special elections. We're totally fucked economically and otherwise unless Democrats in congress -- mainly the Senate -- can get a fucking grip, pay attention to what's happening,…

> Congress is going to try to mass-disenfranchise women before the 2026 midterms. They've stated this on the record. What on Earth are you talking about?

I believe they are talking about the SAVE act, which would apparently introduce new requirements for voter registration, supposedly making it so that identification and legal birth names would need to match in order to register to vote which could impact married women. I am not taking a position on the correct interpretation of the act, just stating initial search results.

Re: xAI has acquired X, xAI now valued at $80B

#446

Post by electriclove »

danso wrote: post #175

Okay, I know Tesla's extremely high P/E ratio is because it's worth is not just tied to cars, and so xAI priced at $20B more than Anthropic does not necessarily mean xAI's AI products are that much better than Anthropic's (e.g. presumably xAI's worth is tied to synergies with Tesla FSD, Optimus, and maybe even Neurolink)...but what products does xAI actually offer, other than Grok being an add-on for premium X subscr…

Grok is also a stand-alone product with an optional $30/month subscription. Perhaps they are seeing a huge increase in usage here and are hoping that subscriptions follow.

Re: xAI has acquired X, xAI now valued at $80B

#447

Post by gwern »

ripped_britches wrote: post #170

It should be noted that the other xAI shareholders are/were supportive of the X takeover and all. So although I personally don’t like Elon, this doesn’t seem like self dealing as many here claim. Solar City worked out well even though it too seemed like self dealing. There are actually bad things to hate him for but acquisitions fraud is probably not on the table.

> It should be noted that the other xAI shareholders are/were supportive of the X takeover and all.

No xAI shareholder has any incentive to be honest about that. If they criticize it, Musk will cut them out of all future investments. And if they are an xAI shareholder, criticism may well be grounds for seizing their equity.

Particularly if they are an xAI employee: Musk companies usually have a equity contract & NDA which says that your options can be canceled at any time for $0, they can be bought back even if vested, you are not allowed to sell without their permission while they are private (ie. forever), and you are gagged about all this: https://techcrunch.com/2024/03/15/spacex-employee-stock-sale... (Similar to Altman's OpenAI NDAs and equity agreements that OAers were unpleasantly surprised to discover back around the coup.)

Re: xAI has acquired X, xAI now valued at $80B

#449

Post by zahlman »

intuitionist wrote: post #379
minwcnt5 wrote: post #199

Earlier quoted context omitted.

This also lets all of his co-investors in X, who were likely pissed that their shares tanked, exchange their shares at an inflated value (but one that still sees them losing 25% of their original investment) for shares in a trendy yet likely overvalued AI company that they consider to have more upside. The other part of this is that if TSLA stock drops to $100-ish he'll be at risk of being margin called on the loans…

The outside investors in X made a profit on paper; Twitter was bought for $44B but the deal was financed with like $31B in equity and $13B in debt. It’s not a big profit (in fact it’s worse than you would have done in T-bills), and of course they’re swapping one illiquid and hard-to-value asset for another, but Elon isn’t giving them a 25% haircut at all.

Isn't Twitter's stock price higher than it was at acquisition?

Re: xAI has acquired X, xAI now valued at $80B

#450

Post by ceejayoz »

zahlman wrote: post #449
intuitionist wrote: post #379

Earlier quoted context omitted.

The outside investors in X made a profit on paper; Twitter was bought for $44B but the deal was financed with like $31B in equity and $13B in debt. It’s not a big profit (in fact it’s worse than you would have done in T-bills), and of course they’re swapping one illiquid and hard-to-value asset for another, but Elon isn’t giving them a 25% haircut at all.

Isn't Twitter's stock price higher than it was at acquisition?

Twitter doesn't have a stock price. It got taken private in the acquisition.
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