Elon Musk’s SpaceX Loan: $1 Billion Sought While Twitter Deal Takes Shape
The Wall Street Journal reports that Elon Musk, CEO of SpaceX, borrowed $1 billion from the rocket manufacturer to pay for the purchase of social media platform X. (formerly known as Twitter).
The loan, which was secured by shares of Musk’s SpaceX, was granted in October and drew down in full the same month. In November, Musk paid back the money with interest. The loan’s purpose has not been made public. A request for comment has gotten no response from either SpaceX or X.
Musk completed the US$44 billion deal to take Twitter and assumed ownership of the social media site by promptly sacking key executives.
According to the report, Musk has agreements with banks to borrow money against the equity in his companies, including his own company, Tesla, a maker of electric vehicles (EV), while privately held SpaceX has acted as his lender.
The report also stated that Musk’s financial situation was further complicated by having to pay for Twitter.
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Ownership as Collateral
According to a filing with the Federal Communications Commission, Musk is SpaceX’s largest shareholder with a 42% stake and roughly 79.0% of its voting power as of March.
The report indicated, citing papers, that SpaceX had $4.7 billion in cash and securities on hand at the end of the previous year. A request for comment from Reuters was not immediately answered by either SpaceX or X.
Elon Musk sold a significant portion of his Tesla stock in 2022, before and after the Twitter acquisition, putting his total sales to above $40 billion, which displeased the electric vehicle maker’s investors.
According to the Wall Street Journal story, Tesla stated in April 2023 that it has further tightened regulations regarding Musk utilizing his ownership position in the company as collateral for loans.
Musk is also a co-founder of the brain-chip business Neuralink in addition to Tesla and X.
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Source: USNews
