Elon Musk has been adamant about buying Twitter, aka X, for a long time. The billionaire acquired 9.6% of the company’s shares. He has been persistent in bringing about change and revamping the platform. In October 2022, Musk finally completed the deal and bought Twitter for a whopping $44 billion. However, the funding for X came from various sources.
Elon Musk resorted to debt financing and procured $13 billion from banks like Bank of America Corp. and Morgan Stanley. He also acquired funding from equity investors like Alwaleed bin Talal, the Saudi Prince. The billionaire even sold his stake in Tesla to provide funding for the purchase of the platform. While there was a lack of about $3 billion, Musk reportedly took a loan of $1 billion from his space exploration venture, SpaceX.
Elon Musk Holds 42% Stake In SpaceX
Elon Musk has been utilizing his several ventures to fund new ventures. He raised large sums of money from investors and invested in the money from SpaceX to fund his satellite-induced internet business, Starlink, and Starship rocket program. Similarly, he borrowed $1 billion from SpaceX to fund his Twitter deal.
Elon Musk’s earlier plan was to borrow $12.5 billion by using his Tesla shares as collateral. The value of the billionaire’s Tesla share at that point was $62.5 billion. However, many banks and Tesla’s shareholders were skeptical that the move would lower the stock price of Tesla shares. So he sold $20 million of his Tesla stake to fund the $44 billion deal.
There was still a discrepancy as to how Elon Musk raised the remaining $3 billion for the Twitter, aka X, deal. Now, the Wall Street Journal report confirms that the $1 billion was arranged by borrowing money from his SpaceX venture. It was easy for him to procure the loan as he is the largest shareholder at SpaceX, with a 42% stake and 79% voting power in March, according to a SpaceX filing with the Federal Communications Commission. Musk returned the borrowed money to SpaceX with interest.
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The Billionaire’s Tesla Venture Is Under Federal Probe For Misusing Company’s Funds
Elon Musk’s Tesla has had a turbulent journey since the company was founded. During the tumultuous funding journey, Musk funded the venture from his pocket and even invested the money he got from selling PayPal. However, in recent times, the company and Musk have faced many federal probes.
Recently, he was found not guilty of making Tesla shareholders lose money after he announced that he would be taking the company public, which did not happen.
Now, Elon Musk is again on the federal investigation agencies’ radar as he is building a house near Tesla’s headquarters in Austin. The name of it is ‘Project 42.’ In July 2023, Tesla’s board launched a probe against the billionaire for using the company’s resources to fund his secret house project.
As per The Wall Street Journal report, the US Attorney’s Office for the Southern District of New York is asked to investigate the money transferred for the project. The Securities and Exchange Commission has also opened a civil investigation to investigate Elon Musk’s involvement in the project.
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