A Wall Street Journal report says SpaceX investors called out Chief Executive Elon Musk about using the space exploration company’s resources for his tunnel digging effort the Boring Company.
Musk has been known to leverage assets across his various technology company’s. Musk personally borrowed $20 million from SpaceX to help fund the electric-car company. He is the chief executive and largest shareholder of both companies. In 2015 and 2016, according to regulatory filings, SpaceX purchased more than $250 million worth of bonds from SolarCity, the solar-panel installation firm where Mr. Musk was chairman and its largest shareholder. Later in 2016, Tesla acquired SolarCity after other bidders passed.
“The arrangement alarmed some longtime investors in SpaceX, including its largest outside backer, Peter Thiel’s Founders Fund, some of the people said,” according to WSJ. “The investors learned in recent months that despite the diversion of SpaceX resources and staffing to the fledgling Boring startup, it was Mr. Musk who was in line to receive almost all of any future profits, these people said.”
The report said Founders Fund partners debated what to do about the diversion of SpaceX resources. Their concerns reached a SpaceX board member and other company officials. The SpaceX board never voted on devoting resources to Mr. Musk’s new venture.
SpaceX received about 6% of Boring stock, “based on the value of land, time and other resources contributed since creation of the company,” a SpaceX spokesman told WSJ. He declined to comment further on the circumstances surrounding the transaction. The report said SpaceX hasn’t formally notified its investors of the exchange.
In a tweet, Musk called the WSJ report “incredibly misleading.”
Totally false. Buried in this incredibly misleading WSJ article is the actual statement from Thiel’s Founder’s Fund: “we have no concerns whatsoever.”
— Elon Musk (@elonmusk) December 18, 2018
The Boring Company is set to unveil Tuesday its first test tunnel. The entrance to the two-mile-long tunnel is in the SpaceX parking lot at its headquarters in Hawthorne, Calif.