As discussions about whether the electric-car maker Tesla (NASDAQ:TSLA) will be taken private snowball, one idea generating talk is whether SpaceX, Elon Musk’s privately-held rocket company, would help to fund the privatization and take an ownership stake.
Shareholders in SpaceX polled by the news outlet Axios think Musk might pledge either some or all of his stake in SpaceX, which was valued last year at US$21bn, to fund Tesla’s privatization.
But the SpaceX shareholders who spoke to Axios wouldn’t be happy if Musk were to make such a move as they don’t want the rocket company to be involved in financing a Tesla buyout in any way.
Read: Tesla CEO Elon Musk rebuffs Arianna Huffington's calls for him to take time off
“These folks believe they have shares in the Musk company with profits and a deep management bench, and see no reason to marry it with the opposite,” the Axios article said. “They will go nuts if SpaceX itself tries to finance the Tesla buyout, at least in any meaningful way."
A final conclusion is that while SpaceX is profitable, its earnings before interest and tax is “quite narrow and could blow up if a rocket or two does.” So, it would be difficult for Tesla to rely on financing measures provided by SpaceX.
Tesla shares were trading 1.8% lower at US$300.10 in afternoon trade.
Contact Ellen Kelleher at ellen@proactiveinvestors.com