Elon Musk may be the richest person in the world, but that doesn’t mean he won’t take out loans like the rest of us.
In October, the Tesla founder borrowed a whopping $1 billion from another of his companies, SpaceX, The Wall Street Journal reported on Tuesday. The newspaper couldn’t figure out why he took the money, and neither Musk nor SpaceX responded to its requests for comment. Musk did, however, pay back the loan with interest only a month later, in November.
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This isn’t the first time Musk has turned to SpaceX for financial assistance. The spacecraft manufacturer gave him $20 million years ago so that Musk could help the then-struggling Tesla, the WSJ noted. In 2015 and 2016, SpaceX invested $330 million in bonds issued by yet another Musk company, SolarCity. And since 2017, Musk has been allowed to take out increasingly large sums of money from SpaceX, including loans of $100 million and $300 million.
Last year’s loan is perhaps more interesting, however, for a couple of reasons. First, it’s an eye-popping amount of money: SpaceX upped Musk’s borrowing limit to $1 billion last fall, and he cashed in on that change rather quickly. Second, Musk took out the money around the same time he was working to acquire the social-media company then known as Twitter. (Musk has since changed its name to X.)
Initially, Musk had planned to use Tesla shares as collateral in buying Twitter. That idea didn’t sit well with investors, however, and the billionaire eventually pivoted away from that strategy. In the end, Musk paid $44 billion to acquire the company, with $25 billion of that total in cash. We don’t know, though, whether the $1 billion from SpaceX was involved in that deal.
Regardless of what it went toward, the SpaceX loan was a good chunk of that company’s capital. At the end of last year, SpaceX had $4.7 billion in cash and securities on hand, according to documents reviewed by The Wall Street Journal. And the $1 billion given to Musk was 11 percent of the $9 billion in equity that SpaceX has reported selling since 2009, according to regulatory filings cited by the newspaper.
Given that Musk is currently worth more than $234 billion, according to Bloomberg, the $1 billion loan does feel a bit like a drop in the bucket, though.