Saudi Automotive Services Company (SASCO) announced that it had received a notification from the investment fund regarding the fair value of its investment in xAI as of June 30, 2026.

In its statement announced on August 5, 2026, following the publication of its preliminary financial statements for the second quarter of 2026, the company explained that it had received from the investment fund the fair value of its investment in xAI based on the updated data.

The financial details showed that the investment value as of June 30, 2026 amounted to approximately $56.9 million before deducting the marketability discount in accordance with International Financial Reporting Standards. This compares with the investment value reported in the financial statements for the second quarter of 2026, which amounted to $36 million before the discount and $28.8 million after the discount.

This updated valuation resulted in a valuation difference gain of $20.9 million before the marketability discount and $16.7 million after the discount, equivalent to SAR 62.6 million.

The company indicated that the fair value of the investment would be updated in the third-quarter 2026 statements in accordance with the updated valuation it will receive from the fund on that date.

Al Yamamah University students discussed the implications of this announcement and the updated valuation, as well as its impact on the company’s financial statements, as follows:

Valuation Gains and the Sustainability of Operations

Student "ريماس المشعلي" @Rimas Almashali commented by providing a financial analysis, saying: "I believe that the increase in the fair value of SASCO’s investment in xAI is a positive indicator, as it will support third-quarter results through revaluation gains.

However, it is important to distinguish between these gains and operating profits, because performance sustainability depends on the company’s core business, while the investment valuation remains subject to market changes and future valuations".

Distinguishing Between Accounting Profits and Actual Liquidity

Student "محمد الغيهب" @Mohammad Alghaihab added from a timing and investment perspective: "In my view, SASCO’s announcement is positive because it reflects an increase in the fair value of its investment in xAI, but investors need to distinguish between accounting profit and operating profit. The increase in the valuation will raise third-quarter accounting profits, but it does not mean that actual liquidity has entered the company or that its core business has improved.

Therefore, the most important factor remains SASCO’s ability to continue growing its operating businesses, while the xAI investment remains a value-supporting element that may change in the future depending on private-company valuations and conditions in the artificial intelligence sector".

Unrealized Gains and the Limitations of Fair Value Measurement

Student @فهد الطيب concluded the discussion with his financial analysis, saying: "What stands out to me is that the increase in the valuation of SASCO’s investment in xAI does not necessarily mean that the value has become stable, especially given the volatility of the artificial intelligence sector and the impact of declining valuations of related companies such as SpaceX.

The key issue in the third quarter will be the size of the accounting impact on profits, and whether it will be reflected in cash flows or remain merely an unrealized gain. The marketability discount also makes the book value more conservative and realistic. Therefore, it is preferable to focus on the value recorded in the financial statements rather than the theoretical pre-discount valuation".

(xAI) Book Profits Outpace Market Valuation

In an analytical review of the company’s performance, financial and economic analyst "حمد السعيد" @Hamad Alsaeed explains: What SASCO announced as a $20.9 million valuation gain (SAR 62.6 million) from its investment in (xAI) is not a cash flow, but rather a book revaluation captured at a value of $56.9 million on June 30, two weeks after SpaceX shares peaked at $225.64. Today, the stock is trading near its historical low of $108 under pressure from capital expenditures amounting to $18.4 billion, which means that the market had already invalidated this valuation.

Under IFRS 13, the updated valuation at the end of September could fall below the value recorded for the second quarter, amounting to $36 million, threatening to reverse the book profit, particularly with the lifting of restrictions on 911.5 million shares, which would intensify selling pressure.

For investors, the key point is that this noncash item of SAR 62.6 million masks first-half operating losses of SAR 29.7 million. Valuing SASCO based on a stake acquired early at a $24 billion valuation—with a book value of SAR 108 million—misses the essence of its business as a fuel distributor. The company’s true cash leverage lies in monetizing real estate worth more than SAR 500 million, making it necessary to exclude this highly volatile item and focus on the fundamentals.