xAI buys X; deal values social network at $33 billion, $11B less than Musk paid.
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Elon Musk’s X has a new owner—Elon Musk’s xAI
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Gonna just Vibe Code a whole new SSA infrastructure. What could go wrong?
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As far as I can tell, the people he owes money to in Tesla shares can still margin call him. Trading made up stock value in xAI for xitter doesn't change it. He might just think he can pump more private equity rubes with xAI but no one is enough of a rube to buy post-musk xitter. As long as Tesla continues to sink we can keep him busy.
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I was always promised by Cryptonomicron that minority shareholder suits would put a stop to funny shenanigans like this. But I guess that was just science fiction.
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It is an old trick from the days of the Robber Barons. If one of your companies lost value, start a second company with all-new public investment and have it buy the losing company with preferential dividends to the original investors.
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One thing I haven't seen many writers note is that xAI did a series C raise only a few months ago, in December 2024, at a ~$40B valuation. Now, it's spending $33B of it's equity to buy Xitter?
I don't really think that's plausible. What inflated, unrealistic valuation was xAI at when it bought Xitter with that equity, and what would the true purchase price of Xitter be if xAI's valuation were set to somethnig like $40B + a few percent?
I don't really think that's plausible. What inflated, unrealistic valuation was xAI at when it bought Xitter with that equity, and what would the true purchase price of Xitter be if xAI's valuation were set to somethnig like $40B + a few percent?
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Wow... so many dollarydoos. More than I've ever seen, that's for sure.
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It's not spending cash. They issued $45bn in new xAI shares which were distributed to prior Twitter* share holders.
Where it will affect their medium term cash flow is that they also assumed $12bn in debt that Twitter had. That means they're on the hook to make hundreds of millions of dollars a year in additional repayments.
* I will stop deadnaming Twitter when the muskrat stops deadnaming his child.
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It is. Also why real estate is one of the preferred means of money laundering because it's pretty easy to do.
Any guesses which person famous for real estate is also famous for money laundering?
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That's why I said "spending equity" and not spending cash.
The thing is that they paid in xAI shares valued at some imaginary dollar value to come up with the $45B of the imaginary "price" for Xitter.
I'm seeing some reports that trade valued xAI at $80B, which is a ridiculous thing to do three months after a $40B valuation with zero changes to the company in between.
So the "$45B" price in equity is roughly half of that, let's say $23B. Then subtract out the $12B of debt that's a $11B valuation of Xitter, which is only a 12% drop from Fidelity's valuation at $14B last year. That's somewhat more realistic, but still a terrible deal for xAI investors.
Completely made up shenanigans to protect Musk's fragile boy-ego though. Such a child.
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Twitter wasn’t a nazi bar, and X is, so I feel like the renaming is appropriate.
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It is…
I cannot imagine any other reason. Already he used xAI shares to compensate the smart people who lended / invested on x with him.
Now he found a nice way out of that mess. Investors bought an AI company … his AI company buys ( with other people money) his social media company .
He created an exit for himself
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Is this Musk digging in the couch cushions to find liquidity to cover the giant losses he might run into with Tesla?
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The sort of scum who'd "invest" in twitterAI most likely sees this as the best possible thing that could've possibly happened to twtAI right now.
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When you have impunity and it's somewhere between 'irrelevant' and 'actively desirable' if the organization doesn't survive your intervention; probably nothing.
That's sort of the problem: if Team Doge were claiming that they would be rewriting the whole thing under the implicit assumptions of normal modernization projects; like fitness for purpose, user acceptance, feature parity or superiority vs. old system, confidentiality, availability, integrity, etc. saying it coudl be done in a few months would just be a risible lie.
When they can just go in a take a sledgehammer to the old system and, by virtue of there no longer being any other SSA infrastructure, leave whatever their bot and/or contractor pals feel like puking up as the SSA infrastructure it's a totally feasible project; just in the same sort of sense that a hitman who is telling you that all you need is a hammer to perform neurosurgery isn't strictly lying, just not buying in to the implicit premises of medical practice.
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Imagine being some kind of weird true believer with a stake in xAI, and today you learn that your beloved AI company is now devoting its resources to keeping Elon's drowning social media company (bought at a premium while high) above water.
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In other news, it appears he sold one Tesla car every 2 minutes in the first quarter from 4 Canadian dealerships (assuming they were open 24/24) which qualifies him for a 30 million Canadian dollar subvention, right as it was going to expire. hopefully the next administration will jail him with the orange menace.
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So now he’s realized an 11 billion loss on X, so whatever his percentage of that is, he can right that off against stock sales that actually generate cash and not pay any taxes…its nice to be able to make your living on investments. To bad us poor workers can’t decide how much of our income to defer to the future, or write off stock losses against that income, or not have so much wealth tied up in property that gets taxed every year. It would be nice to be taxed like a billionaire!
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Linux-Is-Best
Smack-Fu Master, in training
It is why Canada froze Tesla's rebates and listed them as ineligible to participate further.
The word you're looking for is fraud, which they were indeed doing. The fact that no one has yet gone to jail for it, is concerning.
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Given the descent of Xitter into the far-right fever swamp, I can only see this as progress on the road to an (x)AI Hitler.
And yes, I'm aware of Godwin's law. But face it, neo-Nazi is the favored speech now on X, and that's going to be an ever-increasing component of xAI (Grok, currently, or possibly Heil Trump, who knows)
And yes, I'm aware of Godwin's law. But face it, neo-Nazi is the favored speech now on X, and that's going to be an ever-increasing component of xAI (Grok, currently, or possibly Heil Trump, who knows)
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In addition to the DOGE in SEC thing this times well with Delaware weakening shareholder rights.
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This smells an awful like a corporate ponzi scheme, kicking the valuation can down the road from private company to private company.
We should really assume nothing except spaceX has any real value, and even that only does due to govt subsidies.
In sane times, this would get slapped down hard - but apparently financial crimes are just a qualification to be in the govt.
We should really assume nothing except spaceX has any real value, and even that only does due to govt subsidies.
In sane times, this would get slapped down hard - but apparently financial crimes are just a qualification to be in the govt.
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Good theory. Does The AI company have enough cash to pay off the Twitter lenders or something? Otherwise I'm not sure how this would avoid a margin call unless the lenders wrote contracts badly.
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Yeah. I know the stupid rename annoyed people, but I'm actually grateful he killed off the old name. Clean break.
And now that it's abandoned, Twitter can be the generic term it was always meant to be. Do you tweet on Mastodon or Bluesky? Oh look, the Guardian says there's another incoherent tweet from the president on the twitter only he uses. Guess this is life now.
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I'm already beyond the point of caring what the fuck happens to him.
Let the Saudi's take it out on his ass. Stupidity should be painful, and I'm FINE with fatal, too.
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From a social standpoint both of these companies are completely worthless. Find me a billionaire who isn't willing to invest in another billionaire though; works even better when it's the same billionaire investing in himself.
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The glorious part is he gets to retire debt via raising (involuntarily and without the investors getting to have a say, since it's after the fact) and then raise his percentage ownership of the final company.
The statute of limitations is 5 years. So.. he's got a bit to go to get clear though.
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Gemini doesn't know Musk killed the government investigations into his companies, as some of his first DOGE actions.
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He doesn't give a shit that he ruined twitter because his stake in SpaceX is far greater than his stake in X...X and Tesla combined actually, making that more closely tied to his overall net worth than the companies he keeps fucking up. Not sure if that changed with xai, but if I have to guess he's probably skimming this deal too. SpaceX coming up gangbusters since he partnered with the fat fascist, if his cavalier attitude confuses those who aren't Trump's simps.
Unrelated but also very related:
View: https://x.com/AFpost/status/1877005383039947233
Unrelated but also very related:
View: https://x.com/AFpost/status/1877005383039947233
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