[ddtaylor]

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.

[permo-w]

changes nothing

[achierius]

Yeah it does, presumably he has that much money, which invalidates your original point. Hope that helps explain the situation!

[permo-w]

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

[pavlov]

He's not moving any money around.

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.")

[permo-w]

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

[pavlov]

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.

[pqtyw]

> quite clearly

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...)

[chewbacha]

They are both private companies. Neither has a true market value because they are not on a market.