The mystery behind Elon Musk’s empire stocks: Not everyone can buy!

Access to Elon Musk shares is controlled by a group of associates who quietly build distribution businesses through multiple shell companies, then reap huge fees and profits.

Antonio Gracias and Elon Musk have a long-standing relationship, so much so that the founder of Valor Equity Partners and his family spent their Christmas holidays with Musk in the Bahamas.

For Gracias, it was a lucrative relationship. He became a billionaire in part by investing in most of Musk’s companies over the years.

Now, Gracias and his company have found a way to monetize their position: sell to wealthy outsiders access to shares that are tightly controlled in Musk’s private companies. Gracias, who is now a board member of SpaceX and a former Tesla board member, recently offered investors $1 billion in SpaceX and xAI shares through Valor in an exclusive private sale. If successful, he and the bankers involved will collect millions of dollars in fees.

The documents, along with interviews with investors, lawyers, and bankers, provide a perspective on a shady market that revolves around private company stocks—especially SpaceX, xAI, Neuralink, and Boring Company. Access to the stock is controlled by a close-knit group of Musk associates who have quietly built distribution businesses through multiple shell companies, then reaped huge fees and profits.

Gracias’ stock sale comes amid a sharp increase in SpaceX’s valuation, thanks in part to the company’s prospects for lucrative contracts under the Trump administration. In the second half of 2024, SpaceX’s valuation has increased by 67%, while the stock has increased nearly 30 times since 2015.

Morgan Stanley analysts, led by longtime Tesla speculator Adam Jonas, believe that greater achievements are still ahead. They predict that by 2030, SpaceX will earn $65 billion in revenue and $16 billion in net profit, of which Starlink accounts for 72% and 82%, respectively. They also argue that SpaceX’s growth prospects through 2026 could justify valuations of up to double the current $350 billion.

Although it has grown to become one of the largest companies in the United States, SpaceX is still considered a secret business because all financial situations are hidden, except for a small group of investors and insiders. Most people who have a stake in SpaceX don’t know how the company makes or loses.

The fact that it remains a private company allows SpaceX to escape the scrutiny of the stock market. It is rare for a venture capital firm of SpaceX’s size and stature to remain private for so long. The company has been around for more than two decades and has raised billions of dollars from hundreds of private investors.

One of the ways SpaceX maintains its private status is to limit its investor base. If it owns 2,000 investors — not including employees who own shares through stock compensation packages — then a company is legally obligated to disclose the same financial information as a public company.

In the early days of fundraising, SpaceX was determined not to exceed 2,000. In recent years, as financial results have improved, SpaceX has also not needed to raise more cash by selling shares.

However, the company still has to provide employees and other investors with the opportunity to withdraw some of its holdings. SpaceX does this through separately scheduled sales about twice a year.

After withdrawing shares, these people will sell those interests to other investors through a network of funds. New investors will not appear on SpaceX’s capitalization board and, therefore, the 2,000 figure will never be exceeded.

Investors close to Musk and his companies often enter into deals like this by working directly with the head of the family office, Jared Birchall, or SpaceX Chief Financial Officer Bret Johnson.

“I personally participate and will also raise if it works for you,” venture capitalist David Sacks texted Musk in 2022 after Musk asked if he would invest in Twitter. Sacks is currently the White House’s AI and crypto boss.

It is known that investors who poured capital into the Gracias joint venture received benefits in a limited partnership holding $250 million in xAI shares and $750 million in SpaceX shares. Investors in this deal are required to have at least $50 million in assets and invest a minimum of $1 million.

According to the documents, the sale will bring a large fee to Gracias and UBS, which marketed the deal. According to the transaction documents, Gracias and Valor Equity Partners will earn a management fee of 1% annually. According to the agreement documents, Valor will also earn a performance-related fee known as a “transfer fee” of 20% if the value of SpaceX shares increases by more than 8% annually.

UBS Wealth Management, also Musk’s private bank, received brokerage fees for the deal. The bank will also receive a portion of the performance fees that Valor earns if SpaceX shares increase in value.

SpaceX’s recent rise in value has made the company’s stock a prime target for players in the secondary market who aren’t lucky enough to be friends with Musk. Such stocks tend to be available only in limited quantities.

It is known through Starlink that SpaceX is looking to gain market share in a market worth more than $1 trillion per year. The company has quickly built a network of 7,100 satellites in low-Earth orbit — 62 percent of all spacecraft active around the planet, according to Jonathan McDowell, a space observer at Harvard. It also makes money by providing internet access to planes and ships, and sells a military version called Starshield.

SpaceX does not share financial information, but Chris Quilty, founder of Quilty Space, estimates the company is on track to grow its revenue by 58% by 2025 to $12.3 billion.

“Those are incredible numbers,” he told Forbes.