Elon Musk is finding there is a limit to the amount of money he can raise — even from his exploration company SpaceX — after the privately-owned firm launched a funding round this week.
There is “very tepid demand” in SpaceX’s tender offer for $1.25 billion, a source with direct knowledge of the situation told The Post on Tuesday.
The Post broke the news on Monday that SpaceX was launching the tender offer, raising speculation that Musk — who owned 44 percent of the shares as of August — was selling some stock to help fund his $44 billion Twitter deal.
Musk is not believed to have ever sold stock in SpaceX and it is still not clear that he is participating in this tender offer, a second source close to the situation said.
However, if the offering was oversubscribed, SpaceX might have sold double or triple the initial $1.25 billion it is seeking, the source said.
In August 2020, SpaceX went out raising $1 billion and, after being oversubscribed, upped the amount to $1.9 billion, the source said.
But this tender offer looks like it is not going to be oversubscribed, the sources said. SpaceX still might be able to sell the $1.25 billion in shares that existing stockholders are selling, but likely not much more, sources said.
The company’s $125 billion valuation is 25 percent above its December 2021 valuation and 69 percent more than SpaceX was valued at in February 2021.
“No one is paying up for anything in this market,” the second source said, with public and private valuations of tech companies collapsing.
Musk, meanwhile, has been trying to raise $2 billion to $4 billion from private equity funds like Apollo Global Management in preferred financing for his Twitter bid.
Part of Musk’s problem could be that many of his investors who typically participate in his fund-raisings committed several billion earlier this month to co-invest with him in Twitter. Now that position does not look great considering that Musk has questioned the social media giant’s financials.
Those loyal Musk investors for the moment might be somewhat tapped out, the first source said.
[Written in collaboration with other media outlets with information from the following sources]
