"Combining two of his companies into a new mega-corp supposedly worth more than the sum of its overvalued parts is a classic Musk move. His last self-merging coup came last year when he combined X and xAI. Along with frequent capital raises, Musk's vertically integrated takeovers of his own properties allow him to continue to pump up the values of his start-ups."
"SpaceX sealed the deal by issuing $250 billion in new shares that it handed to xAI's shareholders. The move effectively diluted the holdings of existing SpaceX shareholders. The New York Times summed up the parlous bargain: "SpaceX's longtime backers were forced to shrink their ownership in the company drastically, as a percentage, to pay for the acquisition." That would infuriate most investors, but thanks to the circular nature of Musk's corporate economy-otherwise known as the Muskonomy-"
Elon Musk combined SpaceX with xAI into a consolidated entity valued at $1.25 trillion by issuing $250 billion in new SpaceX shares to xAI shareholders, substantially diluting existing SpaceX ownership. SpaceX's valuation moved from $800 billion in December to $1 trillion for this transaction while xAI was pegged at $250 billion. Many investors overlap across Musk's companies, which reduces resistance to ownership dilution. SpaceX is expected to pursue a public offering that could raise at least $50 billion. Musk's firms increasingly share personnel, investors, business, and vertical integration across operations.
Read at The Nation
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