Elon Musk’s financial maneuvers continue to capture attention as documents cited by The Wall Street Journal reveal that in October of last year, he secured a $1 billion loan from SpaceX. This was a significant development in the same month when Musk took over Twitter, now rebranded as X. The loan was collateralized by some of Musk’s shares in SpaceX, and it was promptly repaid with interest in November.
However, despite the swift repayment, this financial transaction had a notable impact on SpaceX’s balance sheet. At the close of the previous year, the company had approximately $4.7 billion in cash and securities on hand, as reported by the WSJ.
To further finance his acquisition of Twitter and cover other expenses, Musk sold nearly $4 billion worth of Tesla stock in November. Throughout the year, he divested approximately $23 billion in Tesla shares.
It’s worth noting that a substantial portion of the $44 billion deal to acquire Twitter was funded by Wall Street banks such as Morgan Stanley and Bank of America. These loans were secured by Musk’s holdings in Tesla. Importantly, the responsibility for repaying this debt, along with annual interest payments totaling around $1.5 billion, falls on Twitter, not Musk.
Interestingly, Fidelity, a stakeholder in Twitter, has consistently revised down the company’s valuation. In May, Fidelity estimated that Twitter’s value was just one-third of Musk’s original purchase price.
This isn’t the first time Elon Musk has sought financial support from SpaceX. He previously disclosed borrowing $20 million from the company in 2009 to support Tesla’s growth.
The WSJ’s latest report reveals that Musk engaged in a series of loans from SpaceX, totaling $500 million, between 2018 and 2020. These loans were subsequently repaid by Musk by the end of 2021.
In a related matter, Tesla is reportedly under federal investigation for its involvement in “Project 42,” believed to revolve around the construction of a glass house for Elon Musk.
As of now, SpaceX has not responded to requests for comment from Insider, leaving the financial community eager to see how Elon Musk’s intricate financial strategies continue to evolve.
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