Elon Musk secured a $1 billion loan from SpaceX, the company he heads as CEO, around the time of his acquisition of the social media platform X, formerly known as Twitter, The Wall Street Journal reported.
The loan, backed by his SpaceX stock, was approved and drawn down in October 2022 but the reason for acquiring it remains unknown. Musk promptly repaid the loan, including interest, to SpaceX the following month. Musk’s substantial ownership of SpaceX allows him to access loans from the company itself, given his 42% stake and significant voting power.
The unconventional move exemplifies how Musk, the world’s wealthiest person, has the ability to generate cash from his various enterprises without relinquishing shares, allowing him to fund his diverse projects.
Last fall, SpaceX was in the midst of significant investments in its Starship rocket program and Starlink satellite internet business when Musk borrowed the money. The $1 billion loan temporarily redirected a substantial portion of SpaceX’s capital, despite the company’s ongoing involvement in various space missions for NASA and the Pentagon, the WSJ added.
Elon Musk took out a $1 billion loan during the same month he acquired X. Chesnot | Getty Images.
At the end of last year, SpaceX reported $4.7 billion in cash and securities, with the loan representing 11% of the $9 billion in equity it had raised since 2009.
In November, Musk not only repaid the loan but also sold nearly $4 billion worth of Tesla stock, following a similar stock sale in the subsequent month. The sales amounted to approximately $39 billion over more than a year. Musk also mentioned paying over $11 billion in taxes for 2021 and contributed around $25 billion in cash toward his $44 billion acquisition of X in late October.
Related: Elon Musk Expresses Concern Over X’s Future, Says It ‘May Fail’ Amid Turbulent Year
Madeline Garfinkle
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