5 ms·
The outside investors in X made a profit on paper; Twitter was bought for $44B but the deal was financed with like $31B in equity and $13B in debt. It’s not a b
by intuitionist 2y ago
The outside investors in X made a profit on paper; Twitter was bought for $44B but the deal was financed with like $31B in equity and $13B in debt. It’s not a big profit (in fact it’s worse than you would have done in T-bills), and of course they’re swapping one illiquid and hard-to-value asset for another, but Elon isn’t giving them a 25% haircut at all.
- deleted 2y ago[deleted]
- zahlman 2y agoIsn't Twitter's stock price higher than it was at acquisition?
- ceejayoz 2y agoTwitter doesn't have a stock price. It got taken private in the acquisition.
- deleted 2y ago[deleted]
- azemetre 2y agoAlso I think Fidelity open puts out statements on the value of Twitter since they are a shareholder. The only recent info I can find on this was an article from last October: https://www.forbes.com/sites/tylerroush/2024/09/30/elon-musks-x-is-now-worth-around-a-fifth-of-the-44-billion-he-paid-for-it-fidelity-says/ https://www.forbes.com/sites/tylerroush/2024/09/30/elon-musk... Where it states that Twitter is now worth 1/5 of its $44billion price. I highly doubt it re-made up the equivalent value in the span of 6 months. If anything they likely lost more money as advertising sales have plummeted.
- kelnos 2y agoAs the sibling pointed out, private companies don't have stock prices. But I've read estimates that Twitter is worth less $10B now, so less than a quarter what Musk paid for it.
- DoesntMatter22 2y agoThe banks just recently did a debt sale of a lot of that debt close to list price, so 44 billion dollar valuation is probably reasonable. Apparently the company is profitable now, sans the debt, so as long as it doesn't go out of business and can grow on other fronts then it's probably not a problem.
- rwmj 2y ago> profitable now, sans the debt So, not profitable.
- DoesntMatter22 2y agoWith the debt it's break even.
- rwmj 2y agoSo, not profitable.
- Saline9515 2y agoThe company is profitable. The debt is unrelated to assets acquired or previous deficits.
- rwmj 2y agoa.k.a the worst kind of financial engineering. The company is not profitable if it doesn't make a profit when all things are considered. And we're not even talking about the missed opportunity costs of the ~ $27bn cash used to purchase Twitter. Most of that value is completely gone.
- DoesntMatter22 2y agoIf you were an investor in X and put up some of that $27 billion dollars you now own shares in xAI, so it's not not gone.
- echelon 2y agoEven if he made the Twitter investors whole, I wonder how the investors in xAI feel.
- chrisco255 2y agoThey're mostly the same investors.
- johannes1234321 2y agoThey just wait for the next round of this. Maybe SpaceX will require more AI? Or Tesla?
- onlyrealcuzzo 2y agoThey feel great, because he just magically turned a ~50% loss in Twitter into a ~50% return in xAI and a ~0% loss in Twitter. Of course, you can't buy $20B worth of mangoes for $40B worth of Mango Holding Company stock and then suddenly make your mango-holding business worth twice as much money. But you can pretend! Private valuations, especially VC-funded companies, have been nonsense for decades. Elon is just exploiting that egregiously.