Elon Musk borrowed $1 billion from his company SpaceX last year, just before he acquired the social media platform Twitter—now known as X—according to a Wall Street Journal report.
The Journal, citing internal documents, reported that the loan, backed by some of Musk’s shares in the company, was approved by SpaceX in October and Musk withdrew the entire amount the same month.
The money lent to its CEO was a significant portion of the $4.7 billion worth of cash and securities SpaceX had on hand at the end of last year.
Musk paid back the entire loan amount, along with interest only a month later, the report added.
Musk completed his $44 billion acquisition of Twitter on October 27 last year, but it is unclear if the loan from SpaceX was used to fund a portion of the purchase.
42%. That is the percentage of SpaceX’s shares owned by Elon Musk, the Journal’s report noted, citing FCC filings. Musk is by far the biggest shareholder in the company and holds nearly 80% of its voting power, the report noted.
A large portion of Musk’s wealth is tied to his shares in his companies and the billionaire has pledged some of these shares as collateral while borrowing from banks. As of November 2021, Musk had pledged around 36% of all shares he owned in Tesla—worth more than $100 billion—giving himself a massive and evergreen line of credit for when he needs it. However, this did not stop him from selling a large portion of his Tesla stock last year, in the lead up to and after the Twitter acquisition—driving down the price of the EV maker’s shares. Between October and December last year, Musk sold Tesla shares worth around $7.5 billion in two tranches. In a twelve month period starting from late 2021, Musk ended up selling $40 billion worth of Tesla stock. These moves drew anger from some Tesla shareholders, who expressed frustration about the Twitter acquisition, which they saw as a distraction which was damaging the electric car maker.
Elon Musk Borrowed $1 Billion From SpaceX in Same Month of Twitter Acquisition (Wall Street Journal)