$44 billion. That’s how much Elon Musk acquired Twitter for in October 2022.
$1 billion. That’s how much Musk borrowed from the rocket manufacturer he founded, SpaceX, around that same time, according to a new report from the Wall Street Journal.
The report could not definitively connect the $1 billion loan taken out by Musk from one of his privately held companies to his Twitter purchase, but it does seem likely that the two events correlate. The Tesla CEO and SpaceX founder is worth around $200 billion, but he certainly does not have that cash on hand — it’s tied up in assets, primarily Tesla stock. While Musk originally tried to back out of the deal to buy Twitter, he ended up following through with the help of a number of investors.
According to the Wall Street Journal report, Musk quickly paid SpaceX back the $1 billion loan, with interest, the following month. The report also points out that Musk sold around $4 billion in Tesla stock the following month.
As Fortune explains, the “unorthodox” move from Musk was likely an attempt to cause minimal impact to Tesla’s stock. Short sellers, for example, were anticipating that Musk could sell off a chunk of his stock in the electric car company in order to help fund his Twitter acquisition. In addition, Tesla stock was facing a steep decline during this time period, which complicated Musk’s ability to sell off a large chunk of his shares.
Readers will likely question whether Musk was allowed to borrow such a sum of money from SpaceX. And the answer is, yes. SpaceX is a private company and Musk controls a “42 percent stake and almost 79 percent of its voting power,” the report says, according to a SpaceX filing with the Federal Communications Commission.
However, the $1 billion loan from SpaceX came at a time when the company was heavily investing in its Starship program and Starlink satellites. Just one year earlier, Musk had even warned that SpaceX could potentially face bankruptcy due to its spending. With SpaceX involved in government-funded projects, and working with agencies like NASA, the loan could have potentially caused ramifications much broader than just SpaceX the company.
The SpaceX loan is now paid back. However, Twitter, which Musk has rebranded as X, now faces the challenge of making back what Musk spent on it. According to Musk himself, the company’s advertising revenue is down 60 percent from what it was when he acquired the social media platform.
