Alternative Investing Report - March 31, 2025

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*as of 3/30; Sources: S&P, BTC, FTSE, DJRE, CL50

In what can be described as more of a merger than an acquisition, one of Elon Musk’s companies, the AI startup xAI, acquired another - his social media platform X, better known as Twitter. The deal values X at $33 billion ($45 billion minus $12 billion in debt), compared to his original purchase price of $44 billion, but also values xAI at $80 billion, well ahead of its $45 billion valuation from December.

➨ TAKEAWAY: The two companies have already become intertwined, with xAI’s Grok heavily featured on X, and xAI training its model on the large amount of data it can mine from X’s posts. This transaction that combines the two companies seems to help X shareholders the most, who had seen the value of the company drop as low as $10 billion since Musk’s takeover.

Two major auctions happened over the weekend in Hong Kong, with both Christie’s and Sotheby’s holding contemporary sales to cap off Hong Kong’s Art Week. Christie’s sale had a sell-through rate of 95% on 43 lots, and generated $73.3 million in sales, around 6% above the pre-sale low estimate. The centerpiece lot was Jean-Michel Basquiat’s “Sabado por la Noche (Saturday Night),” which sold for $14.5 million, in line with estimates. Sotheby’s also saw a 95% sell through rate on 42 lots, generating $37.5 million in sales, hitting the mid-point of its pre-sale estimates. The biggest sale belonged to Marc Chagall’s ”Fleurs de printemps” which brought in $4.4 million, above its high estimate.

➨ TAKEAWAY: While both sales saw strong sell-through rates, the sales combined brought it the lowest total since 2018. This was not a surprise, however, as both sales more or less met their pre-sale expectations, and there were a number of strong individual performances in each. Given the general slump in the Asian art market, particularly among Chinese collectors, that is enough to call the week an overall success.

🚀 CoreWeave IPO disappoints: The AI infrastructure startup’s highly anticipated public offering closed flat at $40 per share an $19 billion market cap after its valuation was already reduced from $35 billion to $23 billion.

🏡 Hottest neighborhoods: While the #1 hottest neighborhood in the U.S. for 2025 is Prospect Heights in Brooklyn, five of the top ten are in Midwestern suburbs, where affordability and convenience reign supreme.

🏀 Caitlin Clark record: A 1 of 1 card of the WNBA superstar sold for $366,000, setting a new all-time record for any card of a female athlete, breaking a years-old record held by Serena Williams.

🤖 OpenAI revenue: The AI startup expects its revenue to triple this year to $12.7 billion, though it is likely still years away from being profitable.

🏢 Defense industry leasing: The boom in defense and aerospace spending is leading to greater demand for industrial real estate, particularly in areas such as Southern California and Florida, which are home to existing military and aerospace facilities.

🪙 New FDIC ruling: In a reversal of previous policy, the bank regulator announced that banks can engage in crypto activity without prior approval as long as they manage risk appropriately.

Tuesday: The Job Openings and Labor Turnover Survey (JOLTS) report is released.

Wednesday: President Trump’s reciprocal tariffs are scheduled to take effect, which could throw markets into turmoil.

Thursday: Christie’s Shanghai 20th & 21st Century Evening Sale, which will be a good gauge of the Chinese art market; Heritage’s Comics & Comic Art Signature auction begins.

Friday: U.S. unemployment and jobs data released.

Saturday: The NCAA Basketball Final Four kicks off in San Antonio - the national championship game will be next Monday.