Long-term investors would lose about 40% of their investment to subsidize the inflated valuation of X (bought by xAI), the inflated valuation of xAI (bought by SpaceX), and SpaceX (whose valuation is based on the assumption that demand for inference is effectively unlimited, and that everyone will prefer hardware in space over Earth).
The valuation of both companies was inflated prior to acquisition, and Tesla shareholders will be asked to dilute their investment by absorbing that cumulative inflation.
Not even to mention that Musk would have exclusive control over the entire conglomerate, with not even the pretense of a Board to check his power.
When even Steven Mark Ryan is like "let's pump the breaks a little bit," you know it's bad.
He wants control, so that he can use investor’s cash to do epic stuff like humanoid robots, cyber trucks, an AI that tells you that apartheid was actually cool, rocket cars, real life brain controlled robot bacon chungus, etc.
Well, that and being the only reusable rocket company ever with an even bigger version on the horizon and a global Internet service that's about to get a whole lot better thanks to aforementioned rocket. Both of which are hugely profitable.
We do, at least at the time of the merger, as it existed as separate parts prior. https://en.wikipedia.org/wiki/SpaceXAI#Finance
https://en.wikipedia.org/wiki/Initial_public_offering_of_Spa...
“Other shareholder meetings are snoozefests but ours are bangers. Look at this. This is sick.”
Elon’s pay package: he gets 400 million Tesla shares if he raises the market cap of tesla(xspacextwitterxAIx) to $8.5 trillion (nominal). He spent a cool 250 mil on making friends with the republicans, so as to ensure that his incoming epic awesome merger is not blocked.
A merger, plus the amount of inflation this government has already produced over the next decade, will probably see X co hitting Elon’s salary goals.
In the US, GE makes your microwave, aircraft engines, and also the gas turbine your power plant uses.
Siemens makes appliances, MRI machines, and even nuclear reactors I believe.
Or in Korea: Samsung, Hyundai, LG. Samsung makes chips, TVs, washing machines.
Japan: Mistubishi makes washing machines and excavators and mining equipment.
India: Reliance has cell phone service, grocery stores, and oil rigs. Tata makes cars, has tier 1 datacenters, and runs hotels too.
This is hardly a novel idea.
The only recent exception is Samsung because of memory suddenly costing 10x.
For a while, didn't Amazon do the same? They basically ran a loss with Amazon retail but profits on AWS, until they spun off?
So yes, this is fairly common with conglomerates, (Amazon sold diapers at a loss to put diapers.com out of business). And in fact, this tactic is a target for anti-trust laws where they exist.
Until they sold all their compute to anthropic, Ai was the boat anchor.
No way in hell is Twitter making a lick of profit.