By raising $750m in debt, Musk boldly steers SpaceX toward the financial frontier

SpaceX is taking out $750m in bank loan debt so it has fewer investors to piss off when Elon sends crazy tweets.


November 8, 2018

SpaceX announced yesterday that it is looking for a partner to give it $750m of another type of rocket fuel: cold, hard cash.

After discussing a $500m loan with Goldman Sachs months ago, SpaceX has upped the ante and put a new bank in the cockpit: Bank of America Merrill Lynch.

One small loan for Musk, one giant valuation for SpaceX 

SpaceX raised $500m at a valuation of nearly $27B earlier this year, proving venture capitalists in private markets are willing to invest in the moonshot company’s interstellar ambitions.

The company has raised more than $1.9B from VCs and varied investors, and SpaceX’s finances are looking better than ever (its market share of commercial space launches rose from 45% to 65% this year).

So the question is: Why would SpaceX take out expensive debt when it doesn’t need to?

Elon Musk hates haters

Recently, Musk’s erratic tweets have caused short-sellers to send stock in his companies tanking, causing headaches in the short term. 

So while the company still doesn’t need to take on debt, it’s taking out bank loans because they are more private than normal funding — and harder to short.

Daily briefings, straight to your inbox

Business and tech news in 5 minutes or less

Join over 1 million people who read The Hustle

Psst

How'd Bezos build a billion dollar empire?

In 1994, Jeff Bezos discovered a shocking stat: Internet usage grew 2,300% per year.

Data shows where markets are headed.

And that’s why we built Trends — to show you up-and-coming market opportunities about to explode. Interested?

Join us, it's free.

Look, you came to this site because you saw something cool. But here’s the deal. This site is actually a daily email that covers the important news in business, tech, and culture.

So, if you like what you’re reading, give the email a try.