In similar news: my left hand acquired my right hand today in an all stock deal valuing the combined hands at $1T. Praising the announcement my arms noted on the deal: “With these two hands now together, there’s nothing our combined fist of might can’t do.” Competitors, my left and right feet, declined to comment on the merger but are said to be in their own separate talks about a deal.
right but you don't have $1T to do that, whereas clearly he has however much money he's paid for it. it's a weird thing to do, but if he has the money to do it then meh?
In similar news: my left hand acquired my right hand today in an all stock deal valuing the combined hands at $250,000. Praising the announcement my arms noted on the deal: “With these two hands now together, there’s nothing our combined fist of might can’t do.” Competitors, my left and right feet, declined to comment on the merger but are said to be in their own separate talks about a deal.
it doesn't invalidate anything; my original point was that Musk has this much money, meaning that he's just moving money around, meaning that this pretentious analogy is not actually making any kind of insightful point whatsoever. what Musk is doing is taking two entities already with a high market value and then merging them, he's not just deciding randomly that 2 irrelevant things have value. how much money this guy has is irrelevant. it's just a shitty attempt at satire, which I cannot stand
The acquisition is entirely in stock. Shareholders of X are receiving xAI stock in exchange for their X shares. They don't get any cash.
Musk says the new combined entity is worth $80B, but that's on paper. The company certainly doesn't have that much cash or liquid assets. The valuation is based on xAI's previous funding round + whatever number they decided to assign to the X assets + the magic of "synergy" produced by this deal. In other words, it's not based on anything real. (Accountants call this "goodwill.")
right but those entities quite clearly have an existing market value in the region of those numbers. this guy's arms and legs do not. it's a poor analogy that's trying to be too clever
Maybe the guy is pretty good at basketball and sincerely thinks he’s going to be the best player in the world next year? That would make his arms and legs awfully valuable.
Musk’s xAI is in a similar place. It’s an also-ran in a crowded space and it’s not making any money while spending billions. But the founder certainly has great faith in it. Is $80B the right value to assign to that faith? Who knows.
X is "clearly" worth only $10 billion less than what Musk paid for Twitter back 2022? Really? Despite its revenue being 50% lower than it was back then?
As for xAI, Anthropic has a valuation of ~$60 billion. So again not that "clear". Of course they don't have Musk's political connections which might end up mattering quite a bit (of course there's also the risk of Musk being prosecuted in 4 years as well...)
first of all, Anthropic is hardly more successful than xAI. they get a lot of headlines, but how many people actually use Claude? and what else do they have going for them? as far as I've seen and heard Grok is just as successful if not more.
second of all, I would suggest that twitter's value as a whole is very nebulously related to its actual revenue numbers, and is far more related to: - its potential revenue numbers, which are way higher in the hands of someone less controversial and - profit, which we don't really know about because its private anyway, but is likely much higher given the amount of cuts that have been made.
> s I've seen and heard Grok is just as successful if not more.
Most of what I've seen about Grok were the various memes about people trying to trick it into saying stuff about Musk (or trying to expose the filters stopping it from saying bad things about him).
> its potential revenue numbers
Maybe. But it wasn't even that successful financial even in the pre Musk days compared to its competitors. Destroying the brand and reputation also had a non-insignficant impact.
> but is likely much higher
Twitter was barely or not at all profitable before the acquisition so that's not unlikely. Companies that have high net income but stagnant or decreasing revenue generally don't do that well in the stock market, though.
that's not how market values work and there's no such thing as a "true market value". my car has a market value, it not being for sale right now does not change that.
Your car is presumably not unique. Both the model and well... it probably does more or less exactly the same as any other car. If you had an entirely unique one of a kind antique car it would be pretty different.
Estimating "true market value" of companies whose valuation is almost entirely based on their potential long-term growth isn't particularly straightforward until you find a buyer willing to buy a significant or it does an IPO.
>Your car is presumably not unique. Both the model and well... it probably does more or less exactly the same as any other car. If you had an entirely unique one of a kind antique car it would be pretty different.
I fail to see how this is in any way whatsoever relevant. a unique car has a market value, and a non-unique car also has a market value. anything that can be sold has a market value. there's still no such thing as a "true market value"
Well not until you try to sell it and find a buyer.
I mean sure xAI does technically have a market value we just don't know what it is because there is no market that would allow us to determine it.
Of course the price paid by private investors do provide some estimate but a company .e.g. raising $5 billion at a valuation of $150 billions or something like doesn't necessarily have a market value which is that high.
Except there is no money involved. xAI has nowhere near that amount of money in cash or in any liquid assets. The valuation hardly means anything, it might be worth $10 billion, it might be worth $100 billion nobody can tell at this point.
