Musk borrows $1 billion from SpaceX when buying Twitter

Musk borrows $1 billion from SpaceX when buying Twitter

Time Stamp: September 8, 2023 2:06 AM
Source Node: 2868376

Last October, Elon Musk did something many of us wouldn’t even dare to
contemplate over our morning coffee – he borrowed a cool $1 billion from his
own company, SpaceX, according to the Wall Street Journal. That same month he was
also working to acquire Twitter, now X, for $44 billion.

Musk is SpaceX’s largest shareholder with a 42% stake and almost 79% of
its voting power as of March this year. Before you start thinking he’s just
your average billionaire with a penchant for borrowing money, let’s clarify –
he didn’t just walk into SpaceX with an IOU scribbled on a napkin. No, this loan
was backed by some of Musk’s shares in SpaceX, and, he paid it back with
interest a month later.

But here’s where it gets interesting: This borrowed billion was no small
change. SpaceX had $4.7 billion in cash and securities available to it at the
end of last year, as reported by The Wall Street Journal. That $1 billion was a
significant number.

However, Musk didn’t stop there. He also sold huge quantities of Tesla shares around the time of the Twitter deal.

Even Wall Street got in on the action. Morgan Stanley and Bank of
America chipped in with around $13 billion to help fund Musk’s Twitter
ambitions, all backed by a slice of Musk’s holdings in Tesla.

Pay back and falling value

Now, here’s the twist: it’s Twitter, not Musk, that’s responsible for
paying back those Wall Street loans, complete with a yearly interest bill
that’s roughly $1.5 billion.

Fidelity, the name many Americans might associate with their retirement
fund, has been a bit of a buzzkill, repeatedly slashing Twitter’s estimated
value. In May, they said it’s worth just a third of what Musk originally paid.

What’s more, this isn’t Musk’s first SpaceX loan. Back in 2009, he
casually borrowed $20 million from the company to help fuel the Tesla
revolution. Fast forward to 2021, and he took out not one, not two, but three
loans from SpaceX, each worth $500 million. He did, however, pay them back in
full by year’s end.

As for SpaceX, they’re keeping their cards close to their chest and
haven’t chimed in on this financial escapade, if they do, you’ll read about it here.

Last October, Elon Musk did something many of us wouldn’t even dare to
contemplate over our morning coffee – he borrowed a cool $1 billion from his
own company, SpaceX, according to the Wall Street Journal. That same month he was
also working to acquire Twitter, now X, for $44 billion.

Musk is SpaceX’s largest shareholder with a 42% stake and almost 79% of
its voting power as of March this year. Before you start thinking he’s just
your average billionaire with a penchant for borrowing money, let’s clarify –
he didn’t just walk into SpaceX with an IOU scribbled on a napkin. No, this loan
was backed by some of Musk’s shares in SpaceX, and, he paid it back with
interest a month later.

But here’s where it gets interesting: This borrowed billion was no small
change. SpaceX had $4.7 billion in cash and securities available to it at the
end of last year, as reported by The Wall Street Journal. That $1 billion was a
significant number.

However, Musk didn’t stop there. He also sold huge quantities of Tesla shares around the time of the Twitter deal.

Even Wall Street got in on the action. Morgan Stanley and Bank of
America chipped in with around $13 billion to help fund Musk’s Twitter
ambitions, all backed by a slice of Musk’s holdings in Tesla.

Pay back and falling value

Now, here’s the twist: it’s Twitter, not Musk, that’s responsible for
paying back those Wall Street loans, complete with a yearly interest bill
that’s roughly $1.5 billion.

Fidelity, the name many Americans might associate with their retirement
fund, has been a bit of a buzzkill, repeatedly slashing Twitter’s estimated
value. In May, they said it’s worth just a third of what Musk originally paid.

What’s more, this isn’t Musk’s first SpaceX loan. Back in 2009, he
casually borrowed $20 million from the company to help fuel the Tesla
revolution. Fast forward to 2021, and he took out not one, not two, but three
loans from SpaceX, each worth $500 million. He did, however, pay them back in
full by year’s end.

As for SpaceX, they’re keeping their cards close to their chest and
haven’t chimed in on this financial escapade, if they do, you’ll read about it here.

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