Apollo Logs $250M Paper Gains on xAI Debt While Shares Fall 20%
Apollo Global Management netted $250 million in paper gains on its $7 billion xAI debt investment, buying $3.5 billion at 99 cents in December and another $3.5 billion in February with a 10% coupon. Apollo shares fell over 20% in February, their worst monthly drop since 2011.
1. xAI Debt Paper Profits
Apollo invested a total of $7 billion in xAI debt, initially buying $3.5 billion at 99 cents on the dollar in December and adding another $3.5 billion in February. Those loans carry a 10% coupon and saw prices rise to as much as 106 cents after xAI’s announced merger with SpaceX, generating approximately $250 million in unrealized gains.
2. Share Decline and Market Impact
Despite these paper gains, Apollo’s stock dropped over 20% in February, marking its steepest monthly decline since 2011. The sell-off reflects growing investor caution in private equity and credit markets amid broader concerns about AI disruption and rising interest rates.