At One Time, Elon Musk Almost Had to Announce Bankruptcy For SpaceX and Tesla
It’s hard to imagine but at one point both Tesla and SpaceX were at the verge of going bankrupt. Elon Reeve Musk, CEO and CTO of SpaceX, and also CEO and product architect of Tesla Motors, had to undergo a grueling ordeal to keep both companies afloat. And it worked. Tesla and SpaceX are now two of the most idealized and important companies operating today.
In Ashlee Vance’s upcoming book Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future, the author quotes Musk on the dire situation then.
“I could either pick SpaceX or Tesla or split the money I had left between them,” says Musk, founder of both companies. “That was a tough decision. If I split the money, maybe both of them would die. If I gave the money to just one company, the probability of it surviving was greater, but then it would mean certain death for the other company. I debated that over and over.”
In a report by Bloomberg, Musk had to run after every opportunity that could in the rare chance generate capital for the companies. It came down to the wire, and SpaceX landed a NASA contract, barely escaping shutdown. Musk sold off some investments, and Tesla investors agreed to give the company enough to keep moving.
The contract from NASA gave SpaceX $1.6 billion, while another round of $40 million in funding saved Tesla, just hours from announcing bankruptcy.
Musk was also engaged with a brutal public divorce at the time. “I was just getting pistol-whipped,” he says. “You have these huge doubts that your life is not working, your car is not working, you’re going through a divorce, and all of those things. I felt like a pile of shit. I didn’t think we would overcome it. I thought things were probably fucking doomed.”
It was an almost impossible task, but Musk’s hard work helped the fortunes of both companies. You can read more on that over at Bloomberg.