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Photo by Roberto Gonzalez/Getty Images

Last week the New York Times suggested that SpaceX may help Elon Musk finance his attempted buyout of Tesla.

Bottom line: It's possible, but SpaceX shareholders would throw a fit if it's done directly.

Here is what the NYT wrote, within a piece that was broadly noted for Musk's apparent mental fatigue.

Another possibility under consideration is that SpaceX, Mr. Musk’s rocket company, would help bankroll the Tesla privatization and would take an ownership stake in the carmaker, according to people familiar with the matter.

I've spoken to several SpaceX shareholders, and have heard the following:

  • Most of them believe Musk could pledge some or all of his stake in SpaceX, which was last valued in mid-2017 at $21 billion. He's believed to hold a very large stake in SpaceX — possibly around half — and has a history of betting big on himself. And, as Tesla stock continues to sink, Musk may be able to get a much lower price than his proposed $420 per share.
  • They do not want SpaceX to directly finance the Tesla buyout, at least in any meaningful way. These folks believe they have shares in the Musk company with profits and a deep management bench, and see no reason to marry it with the opposite. Particularly given all the conflicts of interest and possible regulatory headaches.
  • Yes, SpaceX is profitable, but EBIT is quite narrow and could blow up if a rocket or two does. One shareholder estimates that the company will do over $2 billion in 2018 revenue (based on expected launches), and that it has around $1 billion of cash on hand. SpaceX also has plenty of access to new capital, both equity and debt.

Go deeper

49 mins ago - Health

CDC: It's time for "universal face mask use"

Photo: Paul Hennessy/SOPA Images/LightRocket via Getty

The CDC is urging “universal face mask use” for the first time since the coronavirus pandemic began, citing recent case spikes as the U.S. has entered a phase of “high-level transmission” before winter officially begins.

Why it matters: Daily COVID-related deaths across the U.S. hit a new record on Wednesday. Face coverings have been shown to increase protection of the wearer and those around them, despite some Americans' reluctance to use them.

2 hours ago - World

Saudi Arabia and Qatar near deal to end standoff, sources say

Qatar's prime minister (R) attends the 2019 Gulf Cooperation Council summit in Saudi Arabia. Photo: Fayez Nureldine/AFP via Getty

Saudi Arabia and Qatar are close to a deal to end the diplomatic crisis in the Gulf following U.S.-mediated reconciliation talks this week, sources familiar with the talks tell me.

Why it matters: Restoring relations between Saudi Arabia and Qatar would bring a sense of stability back to the Gulf after a 3.5 year standoff. It could also notch a last-minute achievement for the Trump administration before Jan. 20.

House passes bill to decriminalize marijuana

Rep. Earl Blumenauer (D-Ore.), a longtime marijuana legalization advocate and co-sponsor of the bill. Photo: Pete Marovich For The Washington Post via Getty Images

The House on Friday voted 228-164 in favor of the Marijuana Opportunity Reinvestment and Expungement (MORE) Act, marking the first time a congressional chamber has voted in favor of decriminalizing marijuana at the federal level.

Why it matters: The Washington Post describes the bill as a "landmark retreat in the nation’s decades-long war on drugs," which has disproportionately affected people of color.