SpaceX to raise $20 billion more by selling bonds
As part of its need for cash both to support its planned major capital projects and partly it appears to pay off some debt, SpaceX now plans to sell bonds in order to raise an additional $20 billion more.
The proceeds from the bond offering will mostly be used to refinance a $20 billion bridge loan SpaceX took in March as it prepared to go public. Such loans basically ensure that companies planning to go public have the money they would need to wait out an unfavorable turn in market conditions.
As the article at the link notes, however, SpaceX is hardly cash poor, having on hand over $100 billion after its initial public offering (IPO) of stock two weeks ago. On the surface this bond sale seems unnecessary, but I suspect its purpose is merely refinancing some already existing debt in order to save the company some money.
The propaganda press has been making much in the past week about the drop in SpaceX’s stock price following its original burst during the IPO, often spinning the drop as proof that SpaceX is not that valuable a company (see this NBC report for example). After raising to above $200 per share from its initial price of $135, it has since dropped to about $160. All of this is entirely normal. New stocks that capture the public’s interest all do this. The stock is simply now finding its natural market price, which by the way is still higher than that initial price.












