Elon Musk Buys $1.4 Billion in SpaceX Stock Ahead of IPO Filing

TLDR

• Elon Musk purchased $1.4 billion worth of SpaceX stock from current and former employees last year
• The purchase was made through Musk’s trust and revealed in a draft IPO prospectus
• SpaceX approved a plan to award Musk 60 million additional shares tied to market cap and space data center goals
• Shares would vest in $500 billion market cap increments, starting from $1.1 trillion up to $6.6 trillion
• SpaceX plans a dual-class share structure giving insiders 10 votes per share vs. one vote for public investors

Elon Musk increased his personal stake in SpaceX last year by buying $1.4 billion worth of stock from current and former employees. The purchase was made through his trust, according to The Information, which cited a draft of SpaceX’s confidential IPO prospectus.

Reuters could not independently verify the report. SpaceX did not respond to a request for comment.

The secondary market transaction shows Musk moving to consolidate his ownership ahead of a potential public listing. SpaceX filed confidentially for a U.S. stock market listing in March.

The company had a strong financial year. SpaceX generated around $8 billion in profit last year on revenue of between $15 billion and $16 billion, Reuters reported in January.

Beyond the share purchase, SpaceX’s board approved a separate compensation plan last month. Under that plan, Musk could receive 60 million additional shares.

The shares would be tied to two conditions. First, SpaceX’s market cap would need to rise from its current $1.1 trillion valuation to as high as $6.6 trillion.

How the Share Vesting Would Work

The stock would vest in stages as the company’s market cap grows in $500 billion increments. That means Musk would unlock portions of the award at each milestone along the way.

The second condition requires SpaceX to complete a plan to build data centers in space. Those facilities would supply computing power to artificial intelligence developers.

SpaceX has not publicly detailed the timeline or cost of the space-based data center project. The plan is described as ambitious in The Information’s report.

IPO Share Structure Explained

SpaceX is also planning a dual-class equity structure for its IPO. Class B shares, held by Musk and a small group of insiders, would carry 10 votes each.

Class A shares sold to public investors would carry just one vote each. This structure would keep decision-making power concentrated with Musk and other insiders even after the company goes public.

Dual-class structures are common among tech companies going public. They allow founders to maintain control while still raising capital from outside investors.

SpaceX has not set a public date for its IPO. The confidential filing in March was the first formal step toward a potential listing.

The compensation package structure, if approved, would be one of the largest ever awarded to a corporate executive. It mirrors a similar pay package Musk previously sought at Tesla, which faced years of legal challenges.

SpaceX’s current $1.1 trillion valuation already makes it one of the most valuable private companies in the world.

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