Comment by jmyeet
5 days ago
Buying Twitter was a financially disastrous decision. It had reportedly lost at least 80% of its value [1]. The loans were secured against Tesla shares so there was the real risk of a margin call and a forced sell off.
And then along came xAI where a bunch of people gave Elon money and he "merged" Twitter and xAI, basically siphoning off billions of the investment funds ti bail himself out. If securities law had teeth, he probably should've gone to prison for this.
At the ssame time, why weer people giving this charlatan man-child billions to invest in AI?
The problem is they weren't buying AI. IMHO they were buying a seat at the table and an influence in the administration, a bit like the Saudi sovereign fund's "investment" in Jared Kushner.
Thing is, this isn't the first time he's done this. Elon used one of his companies (Tesla) to buy another of his companies (SolarCity) who was essentially insolvent but owed a lot of money to a third of Elon's companies (SpaceX). There was a lawsuit but it was dismissed. If you're sufficiently wealthy, the law basically doesn't apply to you [2].
I knew before even clicking on this that the justification would be orbital data centers (and it is). They make no sense becaus eof launch costs, cooling and cosmic rays and solar radiation.
Is this the continuation of the Twitter buyout shell game?
[1]: https://www.cnn.com/2024/10/02/business/elon-musk-twitter-x-...
> Buying Twitter was a financially disastrous decision. It had reportedly lost at least 80% of its value [1]. The loans were secured against Tesla shares so there was the real risk of a margin call and a forced sell off.
No there wasn't any risk of a margin call he instantly leveraged Twitter to take on massive amounts of the debt itself. The purchase of Twitter was much more like a LBO than anything else.
> At the ssame time, why weer people giving this charlatan man-child billions to invest in AI?
Because he's basically got the midas touch as far as investors are concerned. His company don't even need to be "successful" for him to figure out some way to 10x their money.
> At the ssame time, why weer people giving this charlatan man-child billions to invest in AI?
The same reason Adam Neumann got another $350M They all know its a game and that game is prop up the valuations. They get rich off of the speculation and hype rather than the substance
He did acquired a lot of power and influence through it though. He can now shape and influence public discourse worldwide by pulling the algorithmic strings, amplifying information he likes and suppressing information he doesnt like.