Elon Musk’s best friend could make $100 billion on SpaceX. His firm is also owed billions

Key Points:

• Antonio Gracias, a longtime friend and investor of Elon Musk, holds over 7% of SpaceX stock through his firm Valor Equity Partners, making him the second-largest individual shareholder ahead of SpaceX's anticipated IPO.
• Valor Equity Partners has leased AI infrastructure hardware to xAI, a Musk company absorbed by SpaceX, under agreements totaling nearly $20 billion, with SpaceX guaranteeing payments, raising concerns about debt liabilities transferring to public shareholders.
• SpaceX's auditor PwC classified these leases as "failed sale leasebacks," treating them as loans rather than leases, forcing SpaceX to record $9 billion in related-party debt on its balance sheet owed to Valor, which is chaired by Gracias.
• Corporate governance experts criticized the Valor leases as troubling related-party transactions lacking arm's-length terms, suggesting potential insider enrichment and insufficient disclosure about Gracias' role in approving these deals.
• SpaceX's governance structure favors Musk's control, with recent changes limiting shareholder protections and enabling rapid Nasdaq 100 inclusion, which will compel large funds to buy SpaceX shares despite governance concerns, raising questions about oversight and investor protections.