Elon Musk’s X studied at EBITDA and Ebit-Don’t

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Accounting is not a real life. The dollar of revenue in your annual report is not the same dollar in Till. This is often good and often a good thing, from the investor’s point of view. But sometimes financial numbers can block instead of lighting. Elon Musk’s X is an example.

The shares on the social network have recently changed in a Evaluation of $ 44 billion Including debts, the same amount that musk paid to buy – when it was still called Twitter – in 2022. This is a surprise for two reasons. First, technology shares were sliding recently. Second, not long ago, investors in the hacker list x They were writing the value of their investments to a small part of this amount.

How did Musk do that? There are many possible explanations. One of them is that X today is not the same as Twitter yesterday. One change, of course, is a mutation of intervention in artificial intelligence. Musk private intelligence project, xiIt can reach $ 75 billion if the proposed financing comes. In investors in X get a slice of this work.

There are also X marks that work better. People told the Financial Times, nearly 2021 – despite the decrease in revenues since then. This may indicate that Musk makes X more efficient.

Hunting: It is said that profit numbers are before benefits, taxes, destruction and consumption “Violent amendment”. This raises the issue of whether X’s performance appears to be better than it may be with a less aggressive presentation.

In some sense, this is always like with EBITDA, which is the manufacture of accounting designed to soften blocks and bumps. It reflects a simplified view of the remaining revenues after deducting the costs of companies, and ignores investments in the things that the company plans to use over time.

But the accumulated adjustments at the top can increase the cloud of the image. Companies also also exclude one-time expenses-ignite the debate about what this means-and the stock-based compensation. Since technology companies war are warm to keep money and stimulate employees, the modification can be large.

For companies in the NASDAQ complex index, EBITDA, with the exception of stock -based compensation, may be 7 percent average, based on an analysis of the S&P Capital IQ data. The investor who combines Ebitda’s Palantir will find three times if the stock payments are set aside. Crowdstrike increases the Croldstrike company about ten times; DATADOG of Six Double.

Since Ebitda is not a record, it can be designed to suit this occasion. Companies can report their profits “before” anything, and they do so. Think of Ebitdare (real estate costs), Ebitdao (Cucumber Expenses) and – EBITDARD (Research and Development).

In the case of x, it remains to see what they are, and how, these EBITDA modifications. Investors who are trading their unlisted shares are supposed to be enough to run their own complex models. One of them The musk may be itselfBloomberg mentioned on Tuesday.

Nevertheless, this announces another reason to treat assessments carefully: choosing transactions between private sector investors – such as auctions of fine arts – only needs a small number of people to agree to it. When Twitter was still public, the market value of more than $ 40 billion was the result of tens of millions of trading a day. Also, accounting is not realistic, 44 billion dollars, at the present time, is real money.

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