Elon Musk's SpaceX planning to sell its shares to fund bid for Twitter: Report

SpaceX plans to sell existing shares to a select group of buyers starting May 17 and there is suspicion that Elon Musk will be one of the sellers, according to the New York Post. The media agency reported that Musk has been trying to collect more money for his $44 billion Twitter takeover and is not only having a difficult time but also finding it pricey. 

Instead, the billionaire might sell SpaceX stock to help fund the purchase. According to federal documents, Elon Musk controlled 44% of SpaceX shares as of August. However, the tender offer is for existing shares rather than new stock, the New York Post reported citing a private placement source familiar with the situation.

Further, Musk's company raised $337 million in December at a valuation of $100 billion. Moreover, according to a media agency, SpaceX will seek $70 per share this time around, a 25% increase from its previous round, after which there was a 10 to 1 stock split, for a valuation of around $125 billion. Meanwhile, Musk has been working hard to raise additional funds for his Twitter bid.

Tesla stock plummeted after Musk announced his intention to buy Twitter

It is worth noting that Tesla stock has plummeted since Musk announced his intention to buy Twitter last month. The stock closed on May 16 at $724.37, down from near $1,000 when the deal was announced on April 25. Further, according to the New York Post, Morgan Stanley has committed to lending Twitter $3 billion in junior debt to fund the buyout, which could cost Twitter a very high 12% interest rate.

Furthermore, according to reports, SpaceX has had several successful launches in recent months. It had 19 rocket launches this year, including one on May 13, that placed 53 satellites for its Starlink network, which provides Internet access to underserved areas around the world, including war-torn Ukraine. However, there were only 31 launches last year. Furthermore, SpaceX claims that it will beat NASA to Mars this decade.

It is worth mentioning here that Elon Musk has hinted at lowering the $44 billion purchase price he offered for Twitter's "digital town square". Musk claimed on May 16 that Twitter's claim that less than 5% of its users are bot accounts is exaggerated, and that the figure could be as high as 20%. Musk put the deal on hold last week, citing the undercounted bot accounts on the social media platform.

(With agency inputs)

Image: AP/Unsplash