In October, Elon Musk borrowed a staggering $1 billion from his own company, SpaceX, around the same time he acquired Twitter for $44 billion. The loan was approved by SpaceX and backed by Musk’s stock in the company. Although the exact date of the loan is unknown, Musk completed the acquisition of Twitter on October 27th, six months after initiating the process.
Interestingly, Musk wasted no time in paying back the loan. By November, he had returned the $1 billion with interest to SpaceX, according to documents obtained by The Wall Street Journal. This prompt repayment showcases his financial capabilities and dedication to his business ventures.
This is not the first time Musk has used his stake in a company as collateral for a loan. He has a history of borrowing against his Tesla shares, which account for a significant portion of his wealth. Musk owns over 411 million shares, equating to a 12.95% stake and making him Tesla’s largest shareholder.
The loan from SpaceX is unique because it was a private transaction rather than involving a traditional bank. As a privately-held company, SpaceX served as Musk’s lender. With a 42% ownership stake and 79% voting power in SpaceX, Musk has the authority to utilize his company’s resources for personal financial needs.
SpaceX, which has an estimated value of $150 billion, has faced profitability challenges in recent years. Musk has expressed concerns about the company’s financial standing, particularly if it fails to meet production goals for its Raptor engines. However, at the time of the loan, SpaceX reported having $4.7 billion in cash and securities.
The loan from SpaceX represented a significant portion of the equity the company had sold since 2009, amounting to 11% of $9 billion. To prepare for the Twitter acquisition, Musk sold a substantial number of Tesla shares in several multibillion-dollar transactions.
Despite SpaceX’s private status and lack of financial transparency, the company has managed to secure capital through stock issuance. In 2021, SpaceX raised $2 billion through stock sales, an increase from $1.5 billion in the previous year.
Musk’s personal financial activities have also involved selling Tesla stock. In November, shortly after the loan, he sold nearly $4 billion worth of Tesla shares. This followed previous sales of $8.5 billion in April and $6.9 billion in August, all in preparation for the Twitter acquisition. In total, Musk sold a staggering $39 billion worth of Tesla shares in just one year.
Overall, Elon Musk’s borrowing of $1 billion from SpaceX showcases his unique financial strategies and the interplay between his various business ventures. With his entrepreneurial prowess and extensive ownership stakes, Musk demonstrates his ability to navigate the financial landscape while pursuing his ambitious goals.
Denial of responsibility! Vigour Times is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
