Elon Musk thinks it’s a “good idea” to create a holding firm above Tesla, SpaceX, Neuralink, and The Boring Firm — at the least, that’s what the billionaire CEO said in response to the idea on Twitter. Such a holding firm might be merely often known as “X,” longtime Tesla shareholder Dave Lee steered, in a nod to Musk’s ownership of “X.com” from his PayPal days.

Musk notoriously entertains modifications, large and small, to his firms in Twitter’s public square. In 2018 he even steered one so massive (and largely baseless) — taking Tesla non-public utilizing “funding secured” from Saudi Arabia — that he wound up in court.

However the thought right here isn’t so far outdoors the realm of risk. It was solely 5 years in the past that Google surprise-announced a similar shakeup, creating the Alphabet holding firm and splitting a few of its larger and bolder initiatives out into their very own ventures alongside the search big however nonetheless below that new umbrella.

If Musk is entertaining one thing related after thumbing by Twitter, let’s have a assume on what that will even seem like.

Repeating Alphabet

Essentially the most simple approach for Musk to create X might be to roughly observe that Alphabet mannequin. The massive distinction is SpaceX, Neuralink, and The Boring Firm are all separate entities that exist outdoors of Tesla, the one publicly-traded enterprise of the bunch. Let’s begin with Tesla, since that’s the place a lot of the motion should happen.

Right here’s the hilariously paper push-y approach Alphabet deal was structured: Google created a wholly-owned subsidiary referred to as Alphabet. It created one other new wholly-owned subsidiary beneath Alphabet referred to as “Maple Technologies.” It then merged Maple and Google to create a brand new model of Google that was, you bought it, wholly owned by Alphabet.

Straightforward, proper?

As for Google stockholders:

Every share of every class of Google inventory issued and excellent instantly previous to the Alphabet Merger will mechanically convert into an equal corresponding share of Alphabet inventory, having the identical designations, rights, powers and preferences and the {qualifications}, limitations and restrictions because the corresponding share of Google inventory being transformed. Accordingly, upon consummation of the Alphabet Merger, Google’s present stockholders will develop into stockholders of Alphabet. The stockholders of Google won’t acknowledge acquire or loss for U.S. federal revenue tax functions upon the conversion of their shares within the Alphabet Merger.

In different phrases, Google mainly stated “sit tight while we change things up, and when we’re done you’ll now own a slice of Alphabet worth the same amount.”

The identical might be finished with Tesla. Create a Tesla subsidiary referred to as “X,” create a merger entity beneath that, after which mix the merger entity with Tesla. Tesla shareholders remodel into equal shareholders of X, deal finished.

Nicely, not so quick. X would then must deliver the opposite three non-public firms into the fold. As an alternative of having the ability to simply shuffle them round, like Google did with companies like Nest, or Calico, X would most likely have to amass SpaceX, Neuralink, and The Boring Firm.

That shouldn’t be too tough since Musk is almost all proprietor of these firms. The difficulty would extra possible be philosophical. Tesla’s inventory worth is presently very excessive as a result of lots of people imagine within the firm. However how would individuals understand the worth of X inventory if it consists of these different operations? Would X inventory be topic to the less dramatic swings for the reason that firm’s worth can be much less depending on Tesla’s efficiency? Things of that nature.

Combining the 4 firms below X may assist Musk additional promote his futurist imaginative and prescient (making humanity run on sustainable power, settling different worlds, and so on.). Extra boringly, it may assist him consolidate the varied firms’ monetary or human sources departments, which was a benefit Google sought with Alphabet.

Okay now let’s get bizarre.

Musk buys Tesla

What actually doesn’t gel about going the Alphabet route is Musk… kind of despises that Tesla is a public company. Right here’s what Musk wrote when he tried to take Tesla non-public again in 2018:

As a public firm, we’re topic to wild swings in our inventory worth that may be a significant distraction for everybody working at Tesla, all of whom are shareholders. Being public additionally topics us to the quarterly earnings cycle that places monumental stress on Tesla to make selections that could be proper for a given quarter, however not essentially proper for the long-term. Lastly, as essentially the most shorted inventory within the historical past of the inventory market, being public signifies that there are massive numbers of people that have the motivation to assault the corporate.

Tesla’s in a a lot better place financially now, so it doesn’t have to fret a lot concerning the second and third level there. However the general message nonetheless tracks. Musk would quite handle his companies with fewer prying eyes. Would he actually expose SpaceX, Neuralink, and The Boring Firm to the identical sorts of pressures by folding them right into a public holding firm?

In all probability not, so how do you clear up that?

Tesla is the one public firm of the three presently, so… take it non-public. Yep. Let’s run the entire funding secured experiment another time, however neglect making an attempt to promote it off to Saudi Arabia, or Apple. Let’s get weirder.

Musk is now the second-richest man on this planet, presently value round $140 billion. He most likely can’t give you all the cash it could take to purchase out Tesla at its present valuation north of $600 billion — particularly since half his shares in Tesla are already pledged as collateral and the corporate’s board has restricted him to borrowing simply 25 % of the worth of any extra shares. It’s additionally unclear how a lot of his SpaceX shares are pledged as collateral. However utilizing his possession in all 4 firms as the premise for loans, one may see him taking a fair-sized chew out of that $600 billion price ticket.

He would want nonetheless some severe companions to affix him in shopping for out Tesla. Maybe billionaire and Tesla board member Larry Ellison? Looks as if the least Ellison may do after Musk introduced him into the fold following the funding secured debacle, and turned what was a modest investment into what’s now many billions of {dollars}.

Musk does appear to like Tesla’s most loyal shareholders, to the purpose that he tried to vow that they might nonetheless personal a part of the corporate in the course of the failed go-private transaction in 2018 — an thought that confused experts — so possibly he may discover a approach for them to be concerned, too. No matter consortium Musk attracts up may simply stand in for X, purchase Tesla, after which deliver the opposite firms into the fold.


Musk creates one of many particular function acquisition firms, or SPACs, which were oh-so-hot this year and calls it X. He kicks it off with numerous his personal cash (possible from leveraged Tesla and SpaceX shares) and the inventory worth instantly soars as soon as it begins buying and selling, as a result of a) it’s a SPAC and that’s simply how issues work now, apparently, b) its existence as a automobile for brute power capitalism excites the lots, and c) it’s Elon Musk. SPAC X turns into a clean test behemoth, he makes use of it to purchase Tesla and the opposite firms,

Mars Road

Unhappy with merely theorizing what the laws should be on Mars, Musk establishes the primary Mars Inventory Alternate. He fashions it after terrestrial inventory exchanges, however with tweaks to scale back a few of his least-favorite facets (like quarterly reporting guidelines or that pesky Securities and Alternate Fee). No one is kind of positive if it’s authorized, or “real,” however then once more the Outer Space Treaty didn’t precisely go lengthy on monetary regulation now, did it?


Musk reveals he’s bitcoin creator Satoshi Nakamoto, sells all his cash, and buys Tesla.

As you’ll be able to see, Musk has just a few choices if he actually desires to create the type of world-beating conglomerate that solely exhibits up within the films. It could be a protracted shot, however that’s kind of his entire factor. No marvel he thinks it’s a good suggestion.

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