Elon Musk Procured $1 Billion Loan from SpaceX Before He Bought Twitter: Report
Billionaire Elon Musk took a loan of $1 billion from his two-decade-old company ‘SpaceX’ (Space Exploration Technologies Corp.) around the same time when he was buying Twitter (now called X) for $44 billion, according to a WSJ (Wall Street Journal) report. Last October, SpaceX sanctioned the $1 billion loan which was backed by some of Elon Musk’s SpaceX shares. He withdrew all of it down in the same month he took over Twitter. Musk paid back the loan with interest to SpaceX in November, the Wall Street Journal report said, informing that the reason for the loan could not be ascertained.
Reuters reported citing Wall Street Journal report that Musk has had arrangements with banks to procure loans against his shares in his companies including Tesla, while SpaceX has constantly served as his lender. It added that paying for Twitter made Elon Musk’s financial situation complicated. Elon Musk was SpaceX’s largest shareholder with a 42% stake and nearly 79% of its voting power in March.
Both before and after the Twitter deal, Elon Musk sold a substantial chunk of his Tesla shares in 2022, taking his total sales to about $40 billion which frustrated the EV maker’s investors. According to the Wall Street Journal report, Tesla disclosed in April 2023 that it has further tightened rules around Musk utilising his stake in the company to take loans. In the meantime, in December 2022, Ross Gerber, a shareholder in Tesla and Twitter, stated that he was approached to put more money into twitter. Team of Musk had reached out for prospective new investment for Twitter Inc. at the same price as the original $44 billion deal.
At the same time, Musk offloaded more than $3.5 billion worth of Tesla Inc. stock in the second round of sales since acquiring Twitter Inc. He offloaded nearly 22 million Tesla shares over a very short three-day period ending Dec. 14, as per a regulatory disclosure.
There is absolutely no conclusive evidence that loan of $1 billion from SpaceX taken by Musk was meant to buyout twitter (now known as X). WSJ report clearly states that reason for borrowing said money from X by Musk could not be ascertained. Moreover, Musk paid back the loan in November 2022 with interest. This shows that X buyout didn’t complicate financial situation of Musk too much.
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