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Musk's SpaceX in merger talks with xAI

xAI is also in talks with Tesla, and Tesla is also in talks with SpaceX about possible mergers and/or SpaceX IPO before/after merger with xAI - depending on who is doing pre-IPO valuation analysis that would yield maximum capitalization.

This self-dealing is similar to Musk making "sweetheart deal" acquisition of near-bankrupt SolarCity, partly-owned and run by his cousins, by publicly-owned Tesla, and renaming it Tesla Energy.

Remember the much talked about bloated valuation - and Musk's debt - of eX-Twitter that was merged into xAI? When Musk merged eX-Twitter into xAI in March of last year, he valued it at $33B on balance sheet of xAI (when money-losing X was estimated at still high $8B-$9B).

Guess who will "participate in ownership" of this debt after xAI eventually goes public, in whichever merged formed it will be? Yep - the shareholders of new Musk-controlled public entity. And that $45B ($33B of estimated "goodwill" value + $12B in Twitter debt) on xAI balance sheet will provide nice multi-year tax write-offs to acquiring/surviving merger entity.

That's why the Twitter bonds - that were sold to PE institutions by banks which loaned Musk money - went for very solid 97% of nominal value, and not 10% as some "analysts" here were hoping. Whoever bought them understood that Twitter was not going to be kept stand-alone; rather a leveraged stage 1 eventually merged into one of the public entities, with nearly assured payout.

Hiding and amortizing weak spots in bigger, seemingly financially stronger entities is the art of financial engineering.

Just like some subprime and/or substandard mortgages were packaged into AAA-rated MBS and CDOs and sold to public for years before financial meltdown and GFC of 2008.

Similarly, Trump unloaded his personal loans on several casinos when he made them public, one just a year before it went BK - that's how he, once again, avoided what should have been a personal bankruptcy - by making it "not personal - strictly business."
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