(Or more, if you're a middle-out sort)
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.")
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.
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.
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.
just because you don't know the market value of something doesn't mean it doesn't have one
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...)
>quite clearly ... in the region of
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.
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.