The offering of notes on Monday occurs just days after SpaceX’s IPO, indicating the firm’s strategy to reshape its financial structure by substituting short-term bridge financing with long-term debt. This approach could facilitate its ambitious and expensive expansion into artificial intelligence and its next-generation rockets.
In morning trading, its shares dropped 9%, marking a third consecutive day of decline.
SpaceX debuted on the Nasdaq on June 12 after securing $85.7 billion from its initial public offering, making it one of the globe’s most valuable firms.
Post-IPO, Musk retains 82% of SpaceX’s voting power.
”With Musk holding a supermajority of voting rights through a dual-class structure, the issuance of bonds preserves economic ownership for current shareholders without additional share issuance,” explained Adam Sarhan, CEO of 50 Park Investments.
”This decision to raise debt instead of equity clearly emphasizes avoiding further dilution of shareholder value.”
SpaceX has ramped up expenditures on AI infrastructure and the development of its next-generation Starship rocket, investments that have impacted profitability, despite the robust growth of its Starlink satellite internet service.
Last year, revenue increased by 33% to $18.67 billion, although it posted a net loss due to significant spending and the integration of Musk’s AI venture, xAI.
The company has not revealed the size or pricing details of the planned notes offering. According to the announcement, the funds will be allocated for general corporate purposes, repaying existing borrowings under its bridge loan facility, and covering related fees and expenses.
As of the end of March, SpaceX reported holding $15.9 billion in cash and cash equivalents, as noted in its IPO filing.
Additionally, it has entered into a computing power agreement with Reflection AI valued at up to $6.3 billion, securing access to Nvidia GB300 chips for Musk’s Colossus 2 data center, CNBC reported on Monday.
Last week, credit rating agencies assigned investment-grade ratings to the company, reflecting confidence in SpaceX’s financial stability as it advances its costly AI initiatives.
Moody’s has assigned a ”Baa1” rating while Fitch issued a ”BBB+” rating, indicating that SpaceX’s debt is deemed investment-grade and carries moderate credit risk, with adequate capacity to fulfill its financial obligations.
