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Elon Musk is the CEO of several companies, and while his main focus is Tesla and SpaceX, he is also the head of Neuralink and The Boring Company.
There is one thing that all of these entities have in common, and that is the desire to find technical solutions to the problems that humans face or will soon be facing, and to enable everyone to aspire to a better future, according to the Musk’s vision.
While Tesla is a public company, the others remain private property. SpaceX has talked about bringing Starlink – its satellite project – to an initial public offering, as Starlink is currently launching a satellite internet solution to serve the internet to customers in rural areas or those without terrestrial internet access. . The company has dug underground tunnels to reduce traffic congestion.
“Good idea”
When Tesla investor Duff Lee suggested that Musk create a holding company called X, which would act as the parent of several of his projects, Musk seemed intrigued by the idea.
Responding to what Lee posted on Twitter, Musk said it was a “good idea” to create a holding company that would bring together Tesla, SpaceX, Neuralink and The Boring Company.
Such a holding company might simply be known as “X”, as suggested by Dave Lee, a shareholder of “Tesla”, referring to Musk’s ownership of “X.com” since he got hold of it. joined PayPal.
Musk is known to use Twitter to introduce big and small changes to his businesses. This had an impact on the movement of shares of these companies.
But the idea at hand is not far from the realm of the possible. Just five years ago, Google announced a similar change, creating Alphabet Holding and dividing some of its biggest and daring projects into private companies alongside the search giant, and it’s still under this new one. umbrella so far.
What if Musk were to create something similar, what would this giant new bouquet look like?
Repeat the Alphabet experiment
Perhaps the easiest method Musk will use to create an X is to follow Alphabet’s pattern. The big difference is that SpaceX, Neuralink, and The Boring Company are all separate entities outside of Tesla, which is the group’s only publicly traded company. Thus, Tesla is where most things are expected to happen, according to an analysis by The Verge.
Previously, Google had created a 100% subsidiary called Alphabet. It created a new wholly owned subsidiary under Alphabet called “Maple Technologies,” then merged Maple and Google to create a new version of Google that is 100% owned by Alphabet.
Tesla electric cars
According to the analysis, Elon Musk could do the same thing by creating a Tesla subsidiary called ‘X’, then creating an entity to merge under it, then merging that entity with Tesla, thereby transforming the shareholders of the latter in shareholders equivalent to X.
X would then have to join the other three private companies, and conglomerate X might have to acquire SpaceX, Neuralink and The Boring Company.
This shouldn’t be too difficult, as Musk is the biggest owner of these businesses, according to The Verge.
But at a time when Tesla’s stock price is so high because a lot of people believe in the company, how will investors realize the value of X’s stock if it includes these other trades? Will the share of the conglomerate be subject to less dramatic fluctuations as the value of the company will be less dependent on Tesla’s performance?
However, one of the benefits of this mega-deal that will bring the four companies together under X – if it happens – will be to help increase the commercialization of Musk’s future vision.
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