Musk transfers funds for tunneling? Space X investors are questioning

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 Musk transfers funds for tunneling? Space X investors are questioning


Netease Technologies News Dec. 18, according to foreign media reports, Musk will announce the first test tunnel built by Boring Company in recent days. However, including Peter Thiels venture capital fund FoundersFund, SpaceX investors questioned the companys use of resources to support Borings tunneling.

Boring, the new tunnel digging company founded by Elon Musk, Teslas chief executive, has sparked controversy over the decentralization of overlapping assets among different technology companies.

Recently, Musk will announce a test tunnel constructed by Boring Company, which is the first tunnel in the future Expressway and underground highway envisaged by Musk, aiming at relieving traffic pressure.

The entrance to the two-mile test tunnel, located at the headquarters of Space Exploration Technologies Inc. SpaceX in Hawthorne, California, is under construction, partly with equipment purchased by SpaceX employees using SpaceX funds, according to people familiar with the situation. SpaceX is another company controlled by Musk.

Some people familiar with the situation said that the arrangement disturbed some long-term investors in SpaceX, including Founders Fund, a venture capital fund led by Peter Thiel, the companys largest external supporter. Investors have learned in recent months that although SpaceXs resources and employees are occupied by the fledgling start-up, almost all future profits will be exclusively owned by Musk, these people said.

Investors in SpaceX are beginning to question why their investments in the seemingly dedicated satellite and manned Mars company have been partly used to set up an independent company whose business is irrelevant and whose main beneficiary is Musk. Earlier this year, when Boring became an independent company, more than 90% of its equity was owned by Musk, while the rest was owned by early employees.

At an internal meeting this year, FoundersFund partners discussed how to deal with SpaceX resource transfer. A board member of SpaceX and other company executives voiced their concerns, people familiar with the matter said.

The board of SpaceX did not vote on whether to invest resources in Boring, the new company in Musk.

Since then, Boring has offered SpaceX some equity as compensation for its help, but the move has not been reported or disclosed publicly. SpaceX has not officially notified its investors of the details of the transaction. Some investors say they are not aware of this.

Picture: SpaceX provides Boring with venues, time, staff and other resources in exchange for 6% of Boring stock; Tesla sells $400,000 in parts to Boring; and Neuralinks president is also the leader of Boring.

A spokesman for SpaceX said, Based on the value of land, time and other resources contributed by the company since its inception, the company has acquired about 6% of Borings shares. He declined to comment further on the details of the transaction.

Musk also declined to comment through a SpaceX spokesman.

FoundersFund, a venture capital fund, said in a statement that it had learned about the relationship between SpaceX and Boring, but had no concerns.

Boring was unusual from its inception, and Musk sometimes even supported his business empire by shifting the finances of different companies.

When Tesla was founded, he personally borrowed $20 million from SpaceX to help raise money for the electric car maker. He is the CEO and largest shareholder of both companies. According to documents submitted to regulators, SpaceX purchased more than $250 million worth of bonds from SolarCity, a solar installation company, between 2015 and 2016. Musk is chairman of SolarCity and the companys largest shareholder. Later in 2016, Tesla purchased Solar City.

In an interview with the Wall Street Journal in 2016, he said: On several occasions, one company has done much better than others, and I borrow money from a company that has done well.

In April, Boring Corp. filed with regulators disclosed that it had raised $125 million. Jared Birchall, executive director and director, is also president of Neuralink, another biotechnology company controlled by Musk. Tesla has sold about $400,000 in parts to Boring, according to an agency filing this year.

The idea of Boring dates back to two years ago, when Musk wrote on Twitter: Traffic congestion is driving me crazy. Im going to build a tunnel boring machine and start digging...

Last year, he released a Boring Concept Video showing elevators built on the streets that can deliver cars to the platform inside the tunnel and then travel through the tunnel at speeds of up to 130 miles per hour. Another video released in May showed pedestrians stepping onto a future bus, which was then lowered to the ground connected to the tunnel network.

Some SpaceX employees began participating in the project, and last year bought a second-hand giant tunnel boring machine to help build the first tunnel Musk wanted to connect cities like Washington and New York.

It is also difficult for local regulators visiting construction sites to determine who is really in charge of the project. In an interview in August 2017, officials from Californias Occupational Safety and Health Department said that the site safety manager told him he was a SpaceX employee who was not sure whether Boring was an independent company or a SpaceX affiliate.

Documents show that the same security manager informed the regulator a week later that some SpaceX employees were only involved in the project, but were not actually Boring employees. A spokesman for Boring declined to comment further. San Francisco-based FoundersFund and other investors have invested about $2 billion in SpaceX. In this years round of private investment, SpaceX is valued at about $28 billion. FoundersFund and its co-head, Tell, are among the most important supporters of Musk. Earlier, Tell and Musk worked together to develop PayPal, a digital payment company. Tell recently told his colleagues that he still believes in Musk. In October, Taylor also attended a Halloween party hosted by Musk. Source of this article: Liable Editor of Netease Science and Technology Report: Qiao Junjing_NBJ11279

Documents show that the same security manager informed the regulator a week later that some SpaceX employees were only involved in the project, but were not actually Boring employees. A spokesman for Boring declined to comment further.

San Francisco-based FoundersFund and other investors have invested about $2 billion in SpaceX. In this years round of private investment, SpaceX is valued at about $28 billion.

FoundersFund and its co-head, Tell, are among the most important supporters of Musk. Earlier, Tell and Musk worked together to develop PayPal, a digital payment company.

Tell recently told his colleagues that he still believes in Musk. In October, Taylor also attended a Halloween party hosted by Musk. (Han Bing)