ELON MUSK WITHDRAWS $1 BILLION LOAN FROM SPACEX TO ACQUIRE TWITTER
September 5, 2023
Elon Musk, the Chief Executive Officer of SpaceX and Tesla and owner of Twitter, recently withdrew a loan of $1 billion from his rocket company, SpaceX, around the same time he acquired Twitter for a whopping $44 billion. This new development has been reported by the Wall Street Journal.
According to the report, SpaceX approved the $1 billion loan, which was backed by some of Musk’s SpaceX stock, in October. Musk then proceeded to draw down all of the loan in the same month that he took ownership of Twitter. These maneuvers have shed light on Musk’s financial situation and have raised eyebrows among investors and industry observers.
The report also reveals that Musk has previously made arrangements with banks to borrow against his shares in his companies, including Tesla. However, it seems that SpaceX has been serving as his lender in recent times. This, coupled with the hefty price tag of the Twitter acquisition, has further complicated Musk’s financial affairs.
As of March, Musk holds a 42% stake in SpaceX, making him its largest shareholder. He also possesses almost 79% of the company’s voting power. This information was disclosed in a filing with the Federal Communications Commission. Furthermore, documents cited in the Wall Street Journal report indicate that SpaceX had $4.7 billion in cash and securities at the end of last year.
Both SpaceX and Twitter, now known as X, have not yet responded to a request for comment from Reuters.
In a related note, it has been revealed that Musk sold a significant portion of his Tesla shares in 2022. These sales, both preceding and following the Twitter deal, amounted to approximately $40 billion. Investors in the electric vehicle maker expressed frustration over these transactions.
To address concerns about Musk’s use of his stake in Tesla to borrow money, the company tightened its rules in April 2023, according to the Wall Street Journal.
Aside from his roles at Tesla, X (formerly Twitter), and SpaceX, Musk is also a co-founder of Neuralink, a brain-chip startup.
This story has been refiled to fix a typographical error in paragraph 6 and remove an extraneous word in paragraph 7.
Reporting by Nilutpal Timsina and Mrinmay Dey in Bengaluru; Editing by Sherry Jacob-Phillips, Eileen Soreng, and Rashmi Aich