He has done this move before with Tesla buying Solar City. When you do a deal with yourself you can assign any value you want to assets, it isn’t a competitive process. In the previous case Solar City was dying but its acquisition by Tesla was pitched as a great synergy.

https://www.businessinsider.com/solarcity-tesla-energy-belea...

There were a few lawsuits from Tesla shareholders about the acquisition regarding self dealing but they didn’t succeed:

https://en.wikipedia.org/wiki/SolarCity

Tesla bought Solar City for $2.6 billion, and now it looks like the Tesla Energy division had about that much in net income last year alone.

And how much of that is solar instead of Powerwall and Megapack? They don’t break it out in filings unless I missed it.

Tesla Energy existed before Tesla acquired Solar City

Surely a theoretically disgruntled xAI shareholder is going to have a harder time here since they're both private companies and given Elon's proximity to any potential regulators.

Company directors are generally given wide latitude in what they can do without breaching fiduciary duty, so such lawsuits were always going to be an uphill battle.

What is the play here? Using money invested in xAI and its inflated valuation to bail out the X investors?

It bails out Elon and means his Tesla shares (borrowed against to purchase Twitter) won’t be liquidated as Tesla’s share price continues to decline, using xAI investor funds. He uses hype and sentiment (inflating valuations) in the capital markets to always stay slightly ahead of consequences.

Tesla shares are higher now than they were when he closed on Twitter in October 2022.

Heck, TSLA today is higher than on 5 November 2024, less than five months ago!

But lower than on 6 November 2024, less than five months ago.

It is almost the same price.

Tesla shares are higher than when Twitter was acquired. 'Continues to decline' sounds like weasel wording that the media likes to use to push a narrative that doesn't exist.

It is not unreasonable to assume Tesla shares will continue to decline whilst:

a) sales internationally are plummeting at such a rapid pace

b) consumer confidence is down with predictions of a looming recession

c) the brand continues to be tarnished by the association with Musk and Trump

d) auto tariffs will increase the costs of parts and the likelihood of reciprocity

“Continues to decline” is a cushion for the next sentence “downgrade to sell” which cushions you from the ultimate, “new marketing leadership with Barron Trump and someone named Alien Brainrot”.

If I jump off a building and you see me at the 10th floor, I was also 29.4 meters higher 3 seconds ago.

Tesla sales are falling worldwide and losing market share

67% of Americans would not consider buying a Tesla, new poll says - https://electrek.co/2025/03/28/most-americans-would-not-cons... - March 28th, 2025

Tesla (TSLA) Q1 delivery consensus: 377,000 EVs – worst performance in 2 years - https://electrek.co/2025/03/28/tesla-tsla-q1-delivery-consen... - March 28th, 2025

Tesla is banned from Canada EV rebate program, gov freezes suspicous $43 million in rebates - https://electrek.co/2025/03/25/tesla-banned-canada-ev-rebate... - March 25, 2025

Tesla sales fall by 49% in Europe even as the electric vehicle market grows - https://apnews.com/article/tesla-sales-recall-trump-byd-b6f5... - March 25, 2025

Tesla’s stock nosedives — wiping out $700B in gains since Trump’s election victory - https://nypost.com/2025/03/07/business/tesla-stock-drop-eras... - March 7, 2025

Australian Tesla sales plummet as owners rush to distance themselves from Elon Musk - https://www.theguardian.com/technology/2025/mar/06/australia... - March 6th, 2025

https://finance.yahoo.com/quote/TSLA/ (1YR)

Facts you don't like aren't "weasel words."

It's true that Tesla shares recently declined, but the context is important: during 2022-2024 Tesla shares were trading between $100 and $300 (with high volatility), in October 2024 they were at $200-$250, then after elections they skyrocketed to the all time high of $488 (for no fundamental reason), and since then the stock is falling. It's $263 right now - after the latest declines the stock only returned to the price that's still higher than before the elections, and is higher than the 2022-2024 average (which was already unreasonably high and totally disconnected from earnings). So these declines are nothing, at least not yet.

We've only witnessed two months of this. Imagine four years of it.

ivewonyoung and raynier are still correct. TSLA today is higher than on 5 November 2024, less than five months ago.

That's fine if that is the argument (11/5/2024 vs today) vs all the gains since that period lost, I'm not willing to argue the point to death, the brand value destruction will continue. The fundamentals will catch up to the price eventually with enough pressure.

>The fundamentals will catch up to the price eventually.

I'm not saying that TSLA's rollercoaster ride over the past six months is a good thing. I am saying that if you are so convinced, you have the opportunity to put your money where your mouth is.

Perhaps you already have. If so, I wonder if you have also done so with NVDA, which is 21% below where it was on 5 November. Are fundamentals catching up with it, too? Put another way, how much of your crocodile tears about TSLA are driven off of dislike of the company's CEO and largest shareholder, as opposed to "fundamentals"?

NVDA? Not yet, but certainly CoreWeave based on their IPO outcome [1]. TSLA made me very wealthy from IPO to when I exited, my "crocodile tears" are "Elon is a terrible human attempting to destroy democracy and something should be done about that." If you disagree, we have nothing to discuss, there is nowhere to meet in the middle on that. I have no strong preference how he is disempowered and prevented from using his wealth and power to harm.

"Are you just mad he is a powerful bully?" Yeah my dude, that is the problem. If it is a crime to not like people who hurt others with their power, guilty as charged, unapologetically. Am I supposed to feel bad about that position? I do not.

[1] CoreWeave's Debut Dud Extends IPO Malaise Instead of Ending It - https://news.ycombinator.com/item?id=43510363 - March 2025

That and the data that is a part of X can be used by the xAI team. I expect it will be in the TOS if it isn't there already.

"xAI and X’s futures are intertwined. Today, we officially take the step to combine the data, models, compute, distribution and talent."

Weren't they already doing that? I recall before I bailed from X/Twitter they already added an AI training consent toggle, which silently defaulted to "I consent" for all existing users of course.

> I recall before I bailed from X/Twitter they already added an AI training consent toggle, which silently defaulted to "I consent" for all existing users of course.

There's a solution for that: build a Twitter bot that posts strange things.

Are the porn bots still around? Maybe they were the heroes we needed after all.

There is a setting (opt-out outside of EU, opt-in inside EU I think) that allows/forbids data sharing with X since Grok was released.

I think any LLM that’s not trained on X data comes out ahead.

To me it appears to be a way to pay his lenders without liquidating or collateralizing more Tesla stock.

So he can use the funds he raised for xAI to pay out the lenders for the initial Twitter purchase? Otherwise the lenders are just getting xAI stock (all stock deal) which I assume is illiquid?

Yes. He did it with Solarcity already.

Solar roofs was one of many scams.

And he scammed the taxpayers of New York State for a billion dollar factory to build solar roofs. Factory built, stock was pumped, no solar roofs though.

The puffery about waste and fraud is pure projection coming from a scammer like Musk.

Yes same setup as when Tesla bought Solar city .. one playbook he pours out of.

So he just sold himself a company he already owns for a valuation that he himself assigned to that company but that was less than what he paid for it, and he paid entirely using “money” that has a made up value and which he issues himself?

Wild.

Yeah these fantasies where musk would somehow go bankrupt by tanking Tesla and overpaying for Twitter were also wild

He’s literally the richest person the earth has ever known. He’s never going to suffer financially. He has countless levers of power he can pull.

The same fantasy applies to any past or current president ever spending a day in jail. He literally commands the most powerful military apparatus the world has ever seen. Even a sliver of that capability and influence ensures nobody will ever dare to try and slap some cuffs on him

The value of Twitter was set when the bonds used to finance the purchase were sold recently for 97cents on the dollar.

Welcome to very-late-stage capitalism.

And if you can get the right people to believe in the arbitrarily large numbers you invented out of thin air you can get away with just about anything because the wealthy don't have any real consequences.

This is interesting and may point to X / Twitter becoming more AI-driven in the future (many possibilities). Grok has become my go-to AI -- I personally find it better than (the free version at least) of ChatGPT, paid Gemini, and anything else -- though it does have a lot of problems.

Can we speculate if X's CTO didn't like the reorg? 3 days ago "X’s director of engineering, Haofei Wang, has left the company " https://news.ycombinator.com/item?id=43470613

The SEC would likely have a field day with this, if there was still a functional SEC.

I'm not sure the SEC would obviously have jurisdiction, since neither Twitter nor xAI were public companies. The FTC might care about such a merger, however, and I suppose minority investors in xAI would have some ability to file a lawsuit if they think that X was acquired over its fair value.

Xai and Twitter are not in any way competitors. What would the FTC do?

The SEC DOGE was in today?

https://www.reuters.com/world/us/us-securities-exchange-comm...

Ongoing thread here,

https://news.ycombinator.com/item?id=43510093

Does the SEC have any say over privately held companies?

In short, yes.

https://www.sec.gov/resources-small-businesses/capital-raisi...

if this didn’t happen, how much more would TSLA have to drop for the $12B debt to get margin called given it is collateralized by TSLA? IIUC what has happened here is the debt has been repaid by selling xAI equity? Wasn’t xAI constructed in the first place to poof some magic money from thin air to give to unhappy Twitter investors and keep them happy?

It has dropped pretty low (relatively) at some points since the purchase - probably a fair bit under $100 to trigger any margin call.

You can take a look at the price of TSLA during the acquisition of Twitter as a reference.

The only thing worse than investors assigning random made up valuations to their portfolio companies is owners themselves assigning random made up valuations to their companies.

Who is he going to merge the US with after he fucks that up?

With the grok integration into X already being a thing and both being owned by Elon and called X it never really seemed like they were actually two different companies at any point so this is an interesting reminder that they were not.

This is Solar City all over again, but at least this time it's not with public investors money.

He can now use the money raised by xAI, to pay off the debt of X, which was bleeding money.

So today in corporate America we have:

- Trump pardoning one of the most obvious scammer of the past 10 years - Trevor Milton

- Trump pardoning some obvious crypto scammers

- Musk using investors money from one of his companies, to bail out his another company, at the valuation he himself set

Unprecedented times. The damage to the rule of law will be hard repair - it will take decades.

But how can X be the everything company if it's merely a subdivision?

I wonder if Tesla will buy xAI. Doesn't Tesla need the GPU power of xAI? Are they renting it, or do they have their own servers?

As a reminder, the people who held X's debt had written down the company's value to less than $10 billion. So selling your company to yourself for $45 billion dollars is hilarious chicanery.

Musk used his extremely overvalued company to bail out his other way overvalued company that he ran into the ground. It's a thinly-veiled, self dealing ponzi scheme. (It also echos the final fate of Solar City).

There must be some connection between this and the new equity funding last week, I would think?

March 19: "Elon Musk’s social network X has raised close to $1 billion in new equity from investors" "Musk himself participated in the equity raise" "The deal values X’s equity at roughly $32 billion." https://fortune.com/2025/03/19/elon-musk-x-twitter-equity-fu...

"... seeking the truth ..."

Hahaha, ha ha, ha...

Maybe more accurate to say "spreading my truth".

This reminds me of the time I bought a beautiful vintage guitar collection, all in pristine condition, from myself a few years ago. It was an amazing deal and I still don’t know how I lucked out like that.

Ah yes. Now we know why those articles about X's valuation resurgence have been coming out lately. He "rescued the value" by selling it to another company he owns.

Look, maybe the Twitter dataset and control over the algorithm is worth $45 billion. But I've seen the state of ads on Twitter these days and it is clearly not worth anything close to that from advertising income.

xAI's mission is to "understand the universe". Not sure how that aligns with X.

I'd feel great being someone that financed the takeover of X/Twitter, and being stuck with inflate shares in an also-ran AI play. Obviously there is no rule of law for Musk, and no recourse for them.

He'll keep his ball of twine rolling past TSLA's next earnings date on April 22nd.

An also runs acquired an also ran.

what

This is the kind of crap we learned about when studying the "Robber Baron" era in the US public school system. Well, I mean, we were _supposed_ to learn it - evidently a lot of folks did not.

The Robber Baron era was more an instruction manual.

Inspiration for why to stay in school so that you too could become a robber baron. Like all history, learn the previous failings so that you can avoid them.

I don't see any connection to what you're talking about to this. You have to explain.

Thank you, that's a very fair point, and I apologize for my *-centric" viewpoint and such a short quip. That is not what we're aiming for in conversation on this site.

I took a giant shortcut, without providing sources, that was meant to indicate that we are in a situation that closely resembles the "Gilded Age" or "Robber Baron" era in the United States.

I was intending to point towards the actions of individuals in the analogous position of those "Robber Barons", in particular here, Elon Musk.

This dude used the data from Twitter, fed it to xAI (xAI spent lots of CapEx from investment on GPUs). Mix mid-"AI" training on such a ridiculously valuable dataset for free == cool models. Cool models + data stream of Doomscrolling == Higher valuation.

This just seems like a "nepo-baby" hit it big on some meme coin and bailed out Daddy.

Elon Musk is, essentially, bailing out himself using investor money from another company he runs by assigning a very highball evaluation to the company he's been destroying.

I don't know how you can get closer to the robber baron ideal than being able to distort the market like that.

Can someone please explain this with more words?

My take is that its super obvious X is a rapidly failing social media platform that is reportedly very dangerously leveraged with Tesla stock value... but xAI still has that Zombo.com magic where anything is possible and the unattainable is unknown.

Elon bought Twitter for $44B, with a combination of his own money, money raised from investors, and $12B worth of debt secured by his Tesla shares.

Since that time Twitter's valuation continued to drop, and by late 2024 several investors (like Fidelity) had marked the company's overall value down to as little as $9B.

Now with the recent stock market turmoil and Tesla's massive share price drop, his Twitter loan is in danger of getting margin called, and that would spell disaster for Tesla, Twitter and his own finances.

Separately Elon also started xAI, which received $6B of funding at a $40B valuation, and is in talks to raise more.

So now he is doing some financial engineering to "sell" Twitter (X) to xAI. This means (1) whoever owns shares in Twitter can mark up their books again and (2) he can raise more funding for the combined entity and use that to pay off the Twitter loan.

What ever happened with the TSLA shareholders suing over xAI knocking the AI wind out of Tesla's sails?

Guessing it means Linda Yaccarino doesn't get to pretend to be CEO anymore.

I wouldn't be surprised if she's out in a few months.

I for one hope this all ends really, really badly for him and his backers.

I get a kick out of how the link in this story is "twitter.com" instead of "x.com".

Personally, I think everyone should just continue to say "Twitter."

I do and I always will. I refuse to play along with corporate rebrands, be it Twitter, Facebook, Comcast, Charter or anything else.

*you mean "The Facebook" ;)

Don't forget Blackwater!

Currently known as Constellis.

https://en.m.wikipedia.org/wiki/Blackwater_(company)

But you already are just by saying those names

I think Hackernews changes the link to twitter.com after submission to avoid duplicates.

The best way is IMHO to say "social media" that way you're not promoting either

Personally, don't use it at all. Worst social media platform IMO.

And Facebook instead of Meta, although if I think of it, I'd rather not say any of those in any context.

Facebook is a product, Meta is a company. It was always weird to say Facebook in the context of Instagram, WhatsApp, Oculus etc. Heck who even uses Facebook now?

Kudos for the exit, Elon! /s

no thanks