SpaceX shareholders will throw a huge hissy fit if tech billionaire Elon Musk attempts to use the company to bail out his financially strapped electric automaker.
They plan on pushing back if Musk attempts to use SpaceX to directly finance taking Tesla off Wall Street’s stock exchange, according to Axios. Shareholders say the beleaguered billionaire could sell his stake in the company for the ventures.
Shareholders are responding to reports suggesting Musk might use his only profitable company to bankroll his least profitable project. Sources told The New York Times in an Aug. 16 report that Musk is toying with the idea of using SpaceX to take an ownership stake in the carmaker.
SpaceX’s shareholders believe they have shares in a company with profits and a deep management bench and are therefore wary of marrying themselves to a financial basket-case — that’s especially true given the regulatory baggage associated with Tesla. (RELATED: Elon Musk Could Combine Tesla And SpaceX — Setting Up Another Huge Conflict)
Investors got skittish the last time two Musk entities joined forces. People criticized SolarCity and Tesla’s board of directors for not being diverse enough to allow for different voices to take hold within the companies.
Musk tried to convince Tesla investors during the SolarCity merger in 2016 that the move would result in the electric vehicle maker’s board becoming less echo-chamber-like and more diversified. He also hoped the merger would infuse Tesla with much-needed capital for the Silicon Valley company’s fleet of vehicles.
Investors also held out hope the merger would make SolarCity less reliant on a good-ole-boy’s network but are also skeptical. Still, six out of seven board members with SolarCity have direct connections with Musk — Tesla shifted around its board shortly after the merger to address investors’ concerns.
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