WHAT YOU NEED TO KNOW
  • SpaceX recorded a $561 million unrealized investment gain from its stake in Boring Co. during the third quarter.
  • The gain represented more than half of SpaceX’s other income and helped lift net income above $4 billion.
  • Boring Co. raised $3 billion in September at a $23 billion valuation, with backing from the United Arab Emirates.
  • SpaceX also purchased $151 million of Tesla Megapack systems as special committees considered a potential SpaceX and Tesla transaction.

DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.

SpaceX said Thursday that its stake in Elon Musk’s The Boring Co. produced an unrealized investment gain of $561 million during the third quarter. The sizable gain delivered a powerful lift to the company’s reported results for the period.

The gain represented more than half of SpaceX’s “other income” during the quarter. It also boosted net income, which finished at just over $4 billion, according to the company.

SpaceX disclosed the figures in its quarterly financial filing with the Securities and Exchange Commission. The filing put a concrete value on the benefit SpaceX received from its ownership interest in Musk’s tunneling venture.

Boring Co. began inside SpaceX in 2017 before being spun out one year later. The company says its mission is to “revolutionize transportation” through underground tunnels and stations where passengers can enter and leave the system.

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The tunneling company raised $3 billion in September at a valuation of $23 billion. The United Arab Emirates participated in the funding, alongside a roster of other longtime supporters of Musk.

That fundraising provides important context for the unrealized gain reported by SpaceX. The increase remained an investment gain tied to the stake, rather than income from SpaceX’s central business operations.

Boring Co. has announced roughly a dozen projects in cities, but its only tunnels currently open for public use are in Las Vegas. Those tunnels connect passengers with destinations through the Las Vegas Convention Center Loop.

Passengers ride in Tesla vehicles between the downtown convention center and various casino resorts. Despite the broader list of announced projects, Las Vegas remains the only location where the company’s tunnels are presently available for public use.

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In July of last year, Boring Co. reached an agreement to construct about 20 miles of tunnels in Nashville, Tennessee. The proposed system is known as the Music City Loop.

The Nashville project is being designed to transport paying passengers between downtown and the airport in Tesla vehicles. The fast tracked plan triggered a partisan feud when it was approved and drew fresh safety concerns this week involving sinkhole risks.

Boring Co. also has expansive plans in the United Arab Emirates. It intends to build more than 150 kilometers, or 93 miles, of tunnels there, including the Dubai Loop project announced in February of last year.

SpaceX’s filing also revealed a substantial transaction involving another Musk company. SpaceX purchased $151 million worth of Tesla’s Megapack energy storage systems during the quarter.

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Musk addressed the relationship between SpaceX and Tesla during SpaceX’s earnings call on Tuesday. He said he believes it would be a “good idea” for the two companies to merge.

Musk also said SpaceX and Tesla have each formed special committees to discuss a potential transaction. The source provided no further terms or timeline for those discussions.

The proposed combination was not the only financial link among Musk’s companies disclosed during the period. SpaceX’s Megapack purchase and its $561 million Boring Co. investment gain both appeared alongside quarterly results that placed net income above $4 billion.

For SpaceX, the Boring Co. stake became a major contributor to quarterly income even as the tunneling venture remained limited in public operations. Its existing public tunnels are confined to Las Vegas, while projects in Nashville, Dubai and elsewhere remain part of its announced expansion.

The quarterly filing therefore highlighted how a stake originating from a venture created inside SpaceX became a significant financial asset. After Boring Co. was spun out, its latest financing at a $23 billion valuation helped produce the unrealized gain recorded by SpaceX.

DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.