WSJ Reports Citing Self-Obtained Documents
Borrowed Last October and Repaid Principal and Interest Within a Month
Musk Holds 79% Voting Rights in SpaceX
It was recently confirmed that Elon Musk took out a short-term loan of $1 billion (approximately 1.32 trillion KRW) from his space exploration company SpaceX at the time he was acquiring the social networking service (SNS) Twitter (now 'X') in October last year.
The Wall Street Journal (WSJ) reported this on the 5th (local time), citing documents it obtained independently. Musk currently leads five companies: Tesla, the world's largest electric vehicle manufacturer; Twitter; SpaceX; the underground tunnel excavation startup The Boring Company; and the neuroscience startup Neuralink.
According to the report, Musk borrowed $1 billion from SpaceX in October last year and repaid it with interest in November of the same year, just one month later. The exact reason for the loan is unclear, but since the timing coincided with Musk's busy efforts to secure funds for the Twitter acquisition, it is speculated that this money was used in the acquisition process.
Raising over $39 billion for the Twitter acquisition was a topic of interest on Wall Street and elsewhere at the time. Shortly after acquiring Twitter, Musk repaid the funds to SpaceX in November last year and also sold some of his Tesla shares to raise cash.
In addition, Musk actively persuaded institutional investors such as Morgan Stanley and individual investors including Saudi Arabia's Prince Alwaleed bin Talal to secure investment funds for Twitter.
Musk was able to obtain a short-term loan from SpaceX because he is the largest shareholder of the company. As of March, when SpaceX disclosed related information, he held a 42% stake in the company and controlled 79% of the voting rights. Given this situation, WSJ reported that it would still be possible for Musk to borrow from SpaceX today.
SpaceX also approved a short-term loan to Musk in October last year, and it appears that Musk's voting rights were utilized in the decision-making process.
Notably, the timing when Musk borrowed cash through the short-term loan coincided with a critical period for SpaceX, which required significant funding for large-scale projects. Last year, SpaceX had to make substantial investments in the Starship program and Starlink project, for which it attracted investments from investors. Musk even warned around the end of 2021 that SpaceX could go bankrupt.
WSJ explained, "This rare loan is a recent example showing how the world's richest person can extract and raise funds from a company within his empire without having to split his shares."
This is not the first time Musk has used SpaceX funds for other companies he owns. In 2008, when Tesla faced financial difficulties, he borrowed $20 million from SpaceX to prevent bankruptcy. Between 2015 and 2016, Musk invested $330 million in bonds issued by SolarCity, a solar energy company he owned that was later acquired by Tesla.
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