Elon Musk’s Use of SpaceX as a Personal Bank: Borrowing Billions for Twitter Acquisition

Elon Musk borrowed a billion dollars from SpaceX to buy Twitter
It is not the first time that he has used his successful company for his financial operations
Thanks to an exclusive contract, the billionaire can go to SpaceX like a bank

Undoubtedly, one of the most significant technology events this year was the acquisition of Twitter (now X) by billionaire Elon Musk. One of the richest people on this planet decided to buy his favorite social network for a relatively high sum of 44 billion dollars (approx. problem. However, as it now turns out, Musk didn’t have any excess cash available for his purchase.

SpaceX is like a personal bank for Musk

According to the information The Wall Street Journal the billionaire had to “borrow” exactly one billion dollars (approx. CZK 22 billion) from his company SpaceX in order to complete the purchase of Twitter. He returned it with interest a month later. While it might seem like there’s no harm in borrowing money from his own companies, Musk all too often uses SpaceX’s financial stability to bail out his other businesses and make risky financial deals.

For example, in the past SpaceX provided a loan of 20 million dollars (approx. 454 million CZK) to his Tesla, bought bonds of the company SolarCity, which was later bought by Tesla, or provided its premises to the Boring Company, which deals, for example, with the production of personal flamethrowers or the digging of tunnels. However, documents obtained by the WSJ show that SpaceX has a loan agreement with Musk that has been amended several times over the years. In 2017, it allowed Musk to borrow 120 million dollars (about 2.7 billion CZK), which was payable with interest after ten years or 90 days from the call from SpaceX. Now this amount is worth billions of dollars, and Musk has not hesitated to use these loans in the past.

Don’t overlook

Elon Musk bought Twitter and shares are soaring. He paid $44 billion for it

The acquisition of Twitter was not exactly a walk in the park for Musk. The amount offered was quite high, which the successful businessman realized relatively late. Although he tried to back out of the deal, a looming lawsuit eventually forced him to reconsider and follow through on the purchase. Musk agreed to pay $44 billion, of which $25 billion (approx. CZK 500 billion) was to be paid in cash. Subsequently, Musk had to borrow 12.5 billion dollars (approx. 284 billion CZK) by depositing 40% of his share in Tesla as a guarantee. The move alarmed Tesla investors, and the company subsequently tightened rules on how much of its stake Musk can offer as collateral.

Author of the article

Dominik Vlasak

Editor, traveler, fan of technology, Star Wars and good coffee.

2023-09-07 18:30:00
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