Elon Musk has successfully secured a multibillion-dollar margin loan by using Tesla stock as collateral to fund the acquisition of Twitter, now rebranded as X. The recent decline in Tesla’s share price has been attributed to various factors such as slowing EV demand, high interest rates, changing electric vehicle policies, market volatility, and pressure from a coordinated NGO-driven campaign called “Tesla Takedown” aimed at crashing the stock to trigger loan repayment obligations tied to Musk’s pledged equity.
To address this situation, Musk announced the merger of X with his AI startup, xAI, in an all-stock transaction on Friday evening. This move not only strengthens Musk’s financial position but also protects Tesla shareholders and undermines the efforts of the Tesla Takedown campaign. The acquisition values xAI at $80 billion and X at $33 billion, paving the way for a combined entity that leverages advanced AI capabilities with a massive user base to deliver meaningful experiences and accelerate human progress.
The transaction, structured as a stock swap, allows X investors to receive xAI shares in return. Musk, who also heads Tesla and SpaceX, acquired Twitter in a $44 billion deal in 2022. The merger of xAI and X eliminates the risk of a forced liquidation of the margin loan backed by Musk’s Tesla shares, ensuring stability for Tesla shareholders.
Overall, Musk’s strategic move not only bolsters his financial standing but also mitigates the impact of the Tesla Takedown campaign orchestrated by rogue Democrats. The integration of xAI and X aims to create a platform that goes beyond reflecting the world to actively driving human progress.