Elon Musk borrowed $1 billion from SpaceX to support Twitter acquisition: Report

As US billionaire Elon Musk acquired Twitter (Now X)in October, he is believed to have taken a loan of $1 billion from his rocket company SpaceX around the same time.

According to a report published in the Wall Street Journal, SpaceX approved the loan, backed by Musk’s stocks in the company. It must be noted that Musk promptly repaid the loan with interest the very next month, in November.

Musk took ownership of Twitter in October.

Musk is SpaceX’s largest shareholder

With 42 per cent shares, Musk is the largest stakeholder in SpaceX. He also owns almost 79 per cent of voting rights in the company as of March 2023.

Interestingly, when Musk withdrew $1 billion from SpaceX, the rocket company just had $4.7 billion in cash and securities on hand.

The world's wealthiest person also divested nearly $4 billion in Tesla stock in November. In total, Musk liquidated approximately $23 billion in his electric vehicle company's shares last year to support his Twitter acquisition.

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Around $13 billion of Musk's $44 billion Twitter takeover deal was additionally facilitated by Wall Street institutions like Morgan Stanley and Bank of America. These loans were secured by some of Musk's Tesla stock.

Not Musk, Twitter is repaying debt

Rather than Musk, Twitter, now X,is responsible for repaying this debt, with annual interest payments amounting to roughly $1.5 billion.

Fidelity, a shareholder in X, has consistently reduced the company's valuation, estimating in May that it's now worth only one-third of Musk's original purchase price.

Not first time

This isn't the first instance of Musk borrowing from SpaceX; he previously disclosed borrowing $20 million from the company in 2009 to aid Tesla's funding.

According to the latest report from the WSJ, Musk also secured three loans totalling $500 million from SpaceX between 2018 and 2020, all of which were repaid by the end of 2021.

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