Five Easy Ways for Elon Musk to Combine His Companies with SuperConglomerate


Elon Musk thinks it’s a “good idea” to build a holding company above Tesla, SpaceX, Neuralink and Boring Co. – at least, that’s what the billionaire CEO is In response to the idea on Twitter said. Such a holding company can only be known as “X”, longtime Tesla shareholder Dave Lee suggested, owned by Musk’s “X.com” since his papal days.

Musk entertained great changes, big and small, for his companies in the public square of Twitter. In 2018 he made a single suggestion so large (and largely baseless) – to take Tesla private using “funding” from Saudi Arabia – that he was injured in court.

But the idea is not here Hence Out of the realm of possibility. It was only five years ago that Google announced a similar shakeup, creating an alphabet-holding company and splitting some of its larger and bolder projects into its new ventures, along with the search giant, Under the new umbrella.

If Musk is entertaining something similar after thumbing it via Twitter, let’s get an idea of ​​what it will look like.

Repeating alphabet

The most direct way to make X for musk may be to roughly follow that alphabet model. The big difference is SpaceX, Neuralink, and The Boring Company are all separate entities that exist outside of Tesla, the only publicly traded of the bunch. Let’s start with Tesla, because that’s where most of the action will have to go.

The paper outlined here is the push-y way the alphabet deal was structured: Google created a wholly owned subsidiary called Alphabet. it made one more Under the new wholly owned subsidiary alphabet is called “Maple Technologies”. This was followed by the merger of Maple and Google, a new version of Google that you found, it is completely owned by Alphabet.

Easy, isn’t it?

For Google Stockholder:

Each share of each class of Google stock is issued and the outstanding balance will immediately change to an equivalent share of Alphabet stock immediately prior to the Alphabet Merger, the same designation, rights, powers and preferences and qualifications, limitations and restrictions as to the respective shares. Is being converted to Google stock. Accordingly, at the end of the Alphabet merger, Google’s current shareholders will become Alphabet’s shareholders. Google’s stockholders will not recognize gains or losses for U.S. federal income tax purposes upon the conversion of their shares into Alphabet Merger.

In other words, Google originally stated that “when we change things, sit and while we work you will own a slice of the alphabet of the same amount.”

The same can be done with Tesla. Create a Tesla subsidiary named “X”, create a merged entity below That, And then merge entity with Tesla. Tesla shareholders deal in X’s equivalent shareholders.

Well, not so fast. X will then have to bring the other three private companies under the fold. Instead of them being able to shuffle around the bus, as they did with businesses like Google Nest, or Calico, X would likely have to acquire SpaceX, Neurallink and a boring company.

It should not happen very Difficult because Musk is the majority owner of those companies. The trouble will be more philosophical. Tesla’s share price is currently very high because many people believe in the company. But how will people feel the value of X stock if it includes these other operations? Will X stock be subject to less dramatic swings as the company’s value will be less dependent on Tesla’s performance? Things of that nature.

The combination of four companies under X could help Musk sell his futuristic vision (driving humanity to sustainable energy, settling other worlds, etc.). More boring, it could help him consolidate the financial or human resources departments of various companies, which were the benefits sought by Google with the alphabet.

Ok now let’s get weird.

Musk buys Tesla

what Actually There is no jail musk about going the alphabet route … Tesla is a public company. Here Musk wrote that when he tried to take Tesla back in 2018:

As a public company, we are subject to wild swings in our stock price which can be a major distraction for everyone working at Tesla, all of whom are shareholders. Going public also subject us to a quarterly income cycle that puts enormous pressure on Tesla to make decisions that may be right for a given quarter, but not necessarily true for the long term. Finally, as the smallest stock in the history of the stock market, going public means that there are a large number of people who have an incentive to attack the company.

Financially Tesla is in a better place now, so it doesn’t have to be so upset about the second and third point. But the overall message still tracks. Musk will manage his businesses with less prying eyes. Will he really unleash the same pressures by turning SpaceX, Neuralink and Boring Company into a public holding company?

Probably not, so how do you solve it?

Tesla is currently the only public company of the three, so … take it privately. Yes Let’s run the whole funding safe experiment again, but try to sell it to Saudi Arabia or Apple. Let’s bring weirder.

Musk is now the second richest man in the world, currently valued at around $ 140 billion. He might not be able to recover all the money he would have to buy Tesla at its current valuation of $ 600 billion north – especially since half of his shares in Tesla are already pledged as collateral And The company’s board limited him to borrowing only 25 percent of the value of any additional shares. It is also unclear how much of its SpaceX shares have been pledged as collateral. But using his ownership in all four companies as the basis for the loan, one could see him deducting the appropriate size from the $ 600 billion dollar tag.

He would still need some serious partners to join him in buying Tesla. Maybe billionaire and Tesla board member Larry Ellison? It seems like Alison, at least, that Musk brought him into the fold after the funding was secured, and took the turn that was a modest investment of several billions of dollars by now.

Musk is in love with Tesla’s most loyal shareholders, to the extent that he tried to promise that they would still be part of the company during a failed go-private transaction in 2018 – an idea that confuses experts – so Maybe he can find a way for them to join. Whoever pulls the consortium Musk can just stand for X, acquire Tesla, and then bring other companies under the fold.

Spac x

Musk makes a special purpose acquisition company or SPACs this year, which has been oh-so-hot this year and calls it X. He does this with a lot of his money (possible from leveraged Tesla and SpaceX shares) and the stock price starts immediately because once it starts trading, because it’s SPAC and just similar things now work. , Obviously, b) its existence as a vehicle for brute force capitalism excites the masses, and c) it is Elon Musk. SPAC X becomes a blank check behemoth, he uses it to buy Tesla and other companies,

Mars passage

Dissatisfied only about what law should be on Mars, Musk establishes the first Mars stock exchange. They have modeled it after terrestrial stock exchanges, but with tweaks to reduce some of their less-favored aspects (such as quarterly reporting regulations or the Pesky Securities and Exchange Commission). No one is sure if it is legal, or “real”, but then again the Outer Space Treaty did not last long on financial regulation, did it?

Bitcoin

Musk revealed that he is the bitcoin maker Satoshi Nakamoto, sells all his coins, and buys Tesla.

As you can see, Musk has some options if he really wants to create the kind of world-beating group that only appears in movies. It might be a long shot, but it’s like that whole thing. No wonder he thinks it’s a good idea.

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