SpaceX (Space Exploration Technologies Corporation) has once again extended a loan to its boss, Elon Musk. A Wall Street Journal report highlighted that the spacecraft and satellite communications company provided Musk with a $1 billion loan, which coincided with the timing of his Twitter (now X) acquisition.
Pick the best stocks and maximize your portfolio:
- Discover top-rated stocks from highly ranked analysts with Analyst Top Stocks!
- Easily identify outperforming stocks and invest smarter with Top Smart Score Stocks
Per the report, Musk drew the loan in October 2022, which was backed by some of his SpaceX stock. He returned the same, along with interest, in November. However, the purpose of the loan is not known.
It’s worth highlighting that SpaceX has repeatedly helped Elon Musk raise cash for his endeavors. Let’s delve deeper.
SpaceX Raised Musk’s Borrowing Capacity
It’s important to note that Musk’s ability to borrow money from SpaceX has steadily increased. The borrowing capacity was boosted from $120 million in 2017 to $1 billion last fall. Moreover, these loans have helped Musk fund his other ventures. For instance, Musk took a $20 million loan from SpaceX way back to support the then-struggling EV (electric vehicle) titan Tesla (NASDAQ:TSLA).
Further, Musk borrowed funds from the company to use for his other startups, such as Boring Company. Also, SpaceX invested millions in the bonds issued by SolarCity (which was acquired by Tesla), enabling it to finance solar installations.
SpaceX has time and again acted as a lender to Musk. Meanwhile, SpaceX, which has teamed up with Cloudflare (NYSE:NET) to enhance Starlink’s network speed, has turned profitable, which is encouraging. However, shares of its golden child, Tesla, lost a portion of its gains due to the pressure on margins. Though Tesla pushes volumes by sacrificing margins, let’s look at what the Street recommends for the stock.
Is TSLA Stock a Buy, Sell, or Hold?
The analysts remain cautious on TSLA stock due to the short-term margin challenges. It has a Hold consensus rating on TipRanks, reflecting 12 Buy, 13 Hold, and five Sell recommendations. The analysts’ average 12-month price target of $257.75 is roughly in line with its closing price on September 5.
