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An acquisition is a special case (for the company being acquired) and the scrutiny is somewhat higher. At least in Delaware. I have no idea what corporate law
by bradleyjg 2y ago
An acquisition is a special case (for the company being acquired) and the scrutiny is somewhat higher.
At least in Delaware. I have no idea what corporate law is like in Texas.
- dmix 2y agoPrivate companies buying private companies is not heavily scrutinized in general by states, even in Delaware, especially non-public deals with no antitrust issues. The primary risk is stakeholders going through a state court if the company didn't follow standard rules.
- pclmulqdq 2y agoNo X shareholder in their right mind will object to getting a $45 billion valuation (including debt) when their latest valuations have the company at <$10 billion.
- deleted 2y ago[deleted]
- Alive-in-2025 2y agoTwitter still has a lot of users and if they stopped being used by offensive at times racist and awful, then Twitter could get more users, sell advertising and make money probably. Now that's all gone because Twitter could investors need w own a small piece of the giant over inflated Xai, which has value because of AI hype but it's future actual value is questionable. There are so many other AI companies, so what is it that xai can do that justifies an $80 billion valuation?
- monkeywork 2y ago>Twitter could get more users, sell advertising and make money probably How'd that work out in the past with the previous owners?
- acdha 2y agoWell: with the exception of Q1 2020 they were profitable from 2017 until Musk bought the company. Their last year was lower due to a lawsuit settlement but they were making significant profits until his acquisition added huge debt service obligations and tanked revenue.
- monkeywork 2y agohttps://www.businessofapps.com/data/twitter-statistics/ https://www.businessofapps.com/data/twitter-statistics/ https://www.investing.com/academy/statistics/twitter-facts-statistics/ https://www.investing.com/academy/statistics/twitter-facts-s... https://dazeinfo.com/2020/07/30/twitter-global-net-income-by-year-graphfarm/ https://dazeinfo.com/2020/07/30/twitter-global-net-income-by... Long history of not being profitable - 2018 and 2019 feel like more of an anomaly than a trend.
- acdha 2y agoYes, like a lot of tech companies they weren’t focused on profits until their CEO prioritized it over growth but from that point on they were profitable from 2018 on, with the aforementioned bad quarter when everyone cut spending at the start of the pandemic. The one-time deferred lawsuit payout in 2021 masked what otherwise would have been several hundreds of millions in profit. The problem people had understanding them was that they weren’t Facebook or Google. The expectations of a money-printing machine were unrealistic but they had a solid middle-tier business with a large number of solid customers.
- saagarjha 2y agoWell, they found someone who valued it at $44 billion.
- gg82 2y agoI think a great deal of that was because X owned a percentage of X.AI stock. https://www.teslarati.com/x-investors-winning-big-elon-musk-xai-stake-report/ https://www.teslarati.com/x-investors-winning-big-elon-musk-... https://archive.vn/F36yh https://archive.vn/F36yh
- econ 2y agoMaybe hoarding gpus? https://sherwood.news/tech/companies-hoarding-nvidia-gpu-chips-meta-tesla/ https://sherwood.news/tech/companies-hoarding-nvidia-gpu-chi... If anyone makes it work (whatever that means) in software they could buy it?
- kelnos 2y ago> if they stopped being used by offensive at times racist and awful, then Twitter could get more users, sell advertising and make money probably. That's a big if, and I think most people would be pretty skeptical of the possibility of that happening. The fact that outside investors seem to value it at under $10B suggests that's a common enough opinion.
- psd1 2y agoTo me, "make money" only implies financial sustainability. Do you take it to mean unicorn levels of cash? I had an employer taken over by PE and shredded, for the crime of only managing 10% profit margin. Apparently, to some, if 20% of revenue doesn't go into someone's pocket, your business is a corpse. I think the world needs to chuck that attitude in the bin.
- WalterBright 2y agoOpportunity cost is what the business can earn by investing in something else, usually something less risky than what the business is doing. If the business cannot earn more than the opportunity cost, it's a losing investment. Businesses often use an opportunity cost of around 14%, so if the business is earning only 10%, then they are losing 4%. For example, if you start a risky venture that earns 2%, when you could invest the money safely in bonds at 5%, it doesn't make sense to do the risky venture. It's not an "attitude", it's maximizing the use of the money.
- _DeadFred_ 2y agoThis thinking by American business is why tariffs will never bring back whole sectors of manufacturing to US shores. It's not business American companies want to get involved with.
- WalterBright 2y agoBusiness wants to get involved in any endeavor that makes a profit larger than the opportunity cost.
- usrusr 2y ago> so what is it that xai can do that justifies an $80 billion valuation? Crush every competitor through regulation?
- Alive-in-2025 2y agoActually I think that's a great observation! I hadn't thought of that one. But Facebook, open AI, Google, Microsoft have even more money than musk and I'm sure they wont allow that.
- mcphage 2y agoWhat about an xAI shareholder who just paid $45 billion for a bag of rotten turnips?
- pclmulqdq 2y agoI don't think there are that many of them, and I think most of them are very much under the "Musk" spell. This would be the party to sue to block this deal, and it seems unlikely that they will.
- Alupis 2y agoThose valuations are all bs though. They are hinged on traffic estimates and ad revenue. X is clearly worth a lot more than just it's revenue would indicate. What is the most influential social media site worth? Perhaps all of the money in the world...
- bdangubic 2y agoX is now state-sponsored media, not social media. it provides political echochamber for some portion of the population and nothing more than that any longer
- wyclif 2y agoEvery social media platform is, to some degree, an echo chamber. See Bluesky or Mastodon.
- bdangubic 2y agoneither is owned by a man deciding who can say what on the platform :)
- squarefoot 2y agoAnd forces his posts also on people not wanting to follow him.
- motorest 2y agoAnd whines/threats competing social networks when users post content critical of him and organize themselves to not share Twitter links.
- ck2 2y agoNo other platform looks this bad https://cdn.bsky.app/img/feed_fullsize/plain/did:plc:y5xyloyy7s4a2bwfeimj7r3b/bafkreihuamazhsgewbxcg5fyqw4akvjaspyqz7cmhpdhyztg7fon5t7v5y@jpeg https://cdn.bsky.app/img/feed_fullsize/plain/did:plc:y5xyloy... Where are the advertising dollars coming from on that horror show Certainly not $45 BILLION of income over even a century
- sebzim4500 2y agoThis is a stock transaction, so the $45 billion valuation is irrelevant unless you also believe the x.ai valuation.
- Majromax 2y ago> I have no idea what corporate law is like in Texas. Nobody does, really. Texas is relatively new to its 'corporate registration friendly' game, and at least on paper the statutory law is the same. Texas courts don't have to follow Delaware's case history, but it's also not a given that they will rule in a vastly more owner-friendly manner.
- no_wizard 2y agoTo add on to this, Texas as part of this pitch is the promise of less oversight and they not following Delaware’s lead is a plus
- raverbashing 2y agoYes but the owners of X are all elon sycophants so I doubt they will have an issue with this (and honestly xAI stock is better than x stock)