Musk borrowed $1 billion from SpaceX when acquiring Twitter

His space venture has often turned into a personal lender for the world's richest billionaire.
Ameya Paleja
Elon Musk's offer
Elon Musk's offer


Elon Musk, the world's richest person, turned to his privately held space company, SpaceX, last year when he needed a $1 billion loan. The amount was drawn when the SpaceX and Tesla CEO acquired social media platform Twitter, the Wall Street Journal reported.

With a net worth of $234 billion at the time of writing this, Elon Musk is the world's richest person. He has maintained this position for most of the last couple of years thanks to the superior performance of his Tesla stock. Musk has often turned to his stocks as collateral to raise more money from banks, but it now appears that even his space company has been serving as a private lender to him.

Musk's Twitter acquisition

At the height of Tesla's popularity on Wall Street, Musk made a move to acquire a stake in Twitter and openly expressed his interest in acquiring the social media platform and taking it private. Musk, who had quoted a $44 billion offer, quickly realized he was overpaying for the platform and looked for ways to back out.

After Twitter pulled him to court for trying to walk away from his offer, Musk agreed to pay the $44 billion with $25 billion to be paid in cash. Musk was to borrow $12.5 billion by putting up 40 percent of his Tesla stake as collateral. Still, the move worried Tesla investors and the company tightened the rules around how much of his stake Musk could offer as collateral.

Musk later involved more parties when the transaction had to be completed in October. But it now appears that SpaceX lent him some money, which was paid back with interest a month later.

SpaceX: Musk's private bank

Musk's net worth is primarily tied to his stake in his companies, Tesla, SpaceX, and the rest, and his cash-in-hand situation remains largely unknown.

Tapping into one of your privately owned companies for a formal loan might not seem like a big deal. However, in Musk's case, SpaceX, although much smaller than Tesla in valuation, has often rushed in to rescue the billionaire.

Musk borrowed $1 billion from SpaceX when acquiring Twitter
Artist's illustration for a banking system

In 2008, when Musk infamously spoke about taking Tesla private, SpaceX lent $20 million to the electric vehicle maker. Later, in 2015-16, SpaceX purchased $330 million worth of bonds issued by SolarCity, another Elon Musk company, which was later acquired by Tesla.

SpaceX was seen in action again at the Boring Company, which was using SpaceX's facilities for its initial tunneling experiments. The space company later said that it received equity in the tunneling company.

However, documents seen by the WSJ show that SpaceX has a loan agreement in place for Musk, which has been modified multiple times over the years. In 2017, the deal allowed Musk to borrow $120 million, payable with interest after one decade or 90 days after demand from SpaceX. Musk took a loan of $100 million a year later.

In May 2019, this agreement was modified to increase the amount that could be lent, and Musk borrowed another $100 million the same month. In December 2020, the limit was raised to $500 million, which allowed Musk to borrow another $300 million.

In May 2021, Musk repaid the amount with interest, and the ceiling was raised to $1 billion just before Musk needed that amount. A month later, Musk offloaded $4 billion worth of Tesla stock to repay the debt.

These loans were taken after SpaceX raised large sums of money to fuel its Starship and Starlink programs. Musk warned employees to be mindful of their spending, even stating that the company was at risk of bankruptcy.

Add Interesting Engineering to your Google News feed.
Add Interesting Engineering to your Google News feed.
message circleSHOW COMMENT (1)chevron
Job Board