NYT Investigation: Musk Treats SpaceX as a "Savings Account" for Nearly 20 Years, Borrowing $5 Billion at a Interest Rate of Less Than Half That of a Bank

According to Dongcha Beating's monitoring, SpaceX lent $500 million to its CEO Elon Musk, with an interest rate ranging from 1% to 3%, much lower than the concurrent bank prime rate (around 5%). Internal documents obtained by The New York Times from SpaceX show that Musk borrowed in three installments from the company between 2018 and 2020, using SpaceX shares as collateral, with a repayment window of up to 10 years. He fully repaid the loan by the end of 2021, paying approximately $14 million in interest. Calculated at a 4% interest rate, the interest would be around $40 million.

The 2002 Sarbanes-Oxley Act (enacted in response to scandals such as Enron, focusing on corporate governance) explicitly prohibits public companies from granting such loans to executives, but SpaceX, as a private company, is not bound by this regulation.

In addition to self-borrowing, Musk has repeatedly leveraged SpaceX resources to support affiliated companies. During the 2008 financial crisis, he borrowed $20 million from SpaceX to inject into Tesla. From 2015 to 2016, SpaceX acquired SolarCity, a solar energy company founded by his cousin, with a total of $255 million in high-risk debt, despite SpaceX's own investment rules prohibiting such transactions. Musk claimed there were "exceptions" but refused to provide details. In 2016, Tesla acquired SolarCity in a $2.6 billion stock deal, and although a Delaware Chancery Court judge ruled in Musk's favor, he noted that Musk's involvement in the transaction exceeded the scope of what a trustee with a conflict of interest should have done. In February of this year, SpaceX also acquired the cash-burning AI company xAI.

SpaceX investors such as Founders Fund are concerned about Musk prioritizing his own interests. Ann Lipton, a law professor at the University of Colorado Boulder, described these as "conflict of interest transactions," and what Musk did "doesn't look good for SpaceX shareholders." SpaceX is currently valued at over $1 trillion and is preparing for an IPO, at which time it will be required to disclose publicly its financial dealings with Musk and his affiliated companies.