Tesla, SpaceX, Neuralink, The Boring Company = X, the super conglomerate.

[TruckElectric]

And possibly Twitter..........


Elon Musk may combine Tesla, SpaceX and Twitter into new ‘super company’
By
Theo Wayt
April 22, 2022 12:10pm
Updated

Elon Musk has formed three new companies under variations of the name "X Holdings."TED Conferences, LLC/AFP via Get

Elon Musk may be laying the groundwork to combine Tesla, SpaceX and Twitter into a new super company.
As the world’s richest man continues his crusade to take over Twitter, Musk registered three new companies on Tuesday in the tax-friendly state of Delaware under variations of the name “X Holdings.”
The three new companies appear to be financial maneuvering as part of Musk’s Twitter bid.
The first company, X Holdings I Inc., lists Musk as president, treasurer and secretary and would be the parent company of Twitter if the billionaire’s bid succeeds, according to Bloomberg, which first spotted the fillings.
Another entity, X Holdings II Inc., would merge with Twitter as part of the acquisition, while X Holdings III LLC would be used to help fund the transaction, the outlet reported.

Tesla could potentially be merged into an Elon Musk-led super-company.REUTERS
But the filings have also revived speculation about whether Musk plans to merge all his ventures — Tesla, SpaceX, Neuralink, The Boring Company and potentially Twitter — into a single super-conglomerate.
In December 2020, an investor and Musk booster named Dave Lee wrote on Twitter that Musk should “form a holding company called X” that would become the “parent company of Tesla, SpaceX, Neuralink and Boring Company” with the “mission to ensure human survival and progress.”
“Good idea,” Musk responded.

But Musk also appeared to throw cold water on the idea of forming a super-company last week, blaming Wall Street investors for short-term thinking.

“As a public company, you’re just constantly sued,” Musk said in a TED interview. “It’s not that easy to sort of combine these things.”

Elon Musk is currently pursuing a bid to take over Twitter.AFP via Getty Images

In an apparent confirmation of Musk’s reservations, investor Gary Black slammed the idea of the mogul combining his companies on Thursday following reports of the new “X Holdings” entities.

“This is fine if done so @elonmusk can combine his equity stakes to finance a personal bid for $TWTR,” wrote Black, who’s typically a Tesla bull and is a managing partner of investment firm the Future Fund.

“This is a terrible idea if $TSLA brought under its corp umbrella SpaceX and Boring Co.”

“Investors hate conglomerates,” Black added, arguing that Tesla’s impressive profit margins would be diluted by Musk’s other ventures if the companies were combined.

https://nypost.com/2022/04/22/x-holdings/

 

[JBee]

Divide and conquer. Never merge, never put all your eggs in one basket. Thats the whole point of artificial legal entities.

 

[JBee]

what do you mean by that

From a risk management perspective it is better to have risk divided into seperate parts. So if that one part is exposed to a risk, like bankruptcy, litigation or other failure, it doesn't take out the other part that had less risk and was working without any issues.

There is a practical limit to how much you can divide these into individual legal entities (individual companies) but essentially if you put each main activity into its own "compatment" or basket, then all the other compartments will continue if just the one fails.

For example: you wouldn't want a problem or legal case surrounding Tesla Powerwalls, like a software bug that sets the circuit on fire, to stop SpaceX from launching Starlink satellites and providing worldwide broadband internet. So you have the Solar City company supply Tesla ompany made Powerwalls, and the SpaceX company use Starships to launch the Starlink company satellites. Potentially the Starlink IPO might just be for subscribers but they lease satellite time from SpaceX or some other EM family company.

Anyway, the point is they are not the same company, and each only has limited liability for their specific operation.

 

[Luke42]

Anyway, the point is they are not the same company, and each only has limited liability for their specific operation.

When a company has multiple business-lines, you always have to answer the question of "why are these the same company?"

Sometimes it's as simple as "both business-lines share the factory floor and the staff knows how to do both things". Sometimes you need to sell both sunscreen and umbrellas.

Sometimes it's something more abstract, like merging a company that has a great product (but poor financial management & infrastructure) into a company which has great management & infrastructure but which needs an innovative product-team to grow. This happens every few months in my industry.