Then there is the quiet investor who once put up a $1 million for Elon Musk when he needed it most. As SpaceX makes its highly anticipated entrance on the public stage, Antonio Gracias is in for a very nice payday. Put simply: at a $1.77 trillion valuation, his stake in the firm, held by Valor and other entities, comes to some $65 billion. Only Musk has more.
The one who was there for the hard times
Gracias, 55, isn’t just a face on a check. He has made a name for himself as a man who will get his hands dirty. There are stories of him napping on the floor of a Tesla plant to be on hand when they were in a bind over a supply or production issue. He has been in the boardroom for both Tesla and SpaceX when it counted.
You have to go back to the old PayPal days to see where this started. In 2005, Valor was among the first institutions to put money in Tesla. He was in with SpaceX in 2008, and during the financial crisis of that year, he was the one to give Musk a $1 million short-term loan, according to the CEO.
A listing to rattle the market
They are looking to put a $135 per share price on it, which runs to a $1.77 trillion value. On paper, that is a $75 billion raise. If it happens, you’ll have the largest stock market debut on record and a whole new breed of space-faring investor in the mix.
Musk is sitting on roughly 42 per cent of the company, or $740 billion at these numbers. But then you have Valor. Theirs would be the second-biggest holding on the books, a case study in how a few well-timed wagers in private can make for a tidy transition to the public side.
Opening the door to the rest of us
SpaceX is doing things a bit differently with the retail crowd. An ordinary IPO might let in 5 to 10 per cent of shares for individual buyers; SpaceX may put out 30 per cent. Fidelity clients with a couple of grand in their account could be in the running.
And for the staff, the numbers are eye-popping. Some 4,400 of them, past and present, stand to be made over into millionaires. A few hundred could be looking at stock in excess of $100 million. You don’t see that kind of internal liquidity often, even in tech.
What it all adds up to for Valor
Valor’s gross assets are in the neighbourhood of $16 billion. So a $65 billion piece of SpaceX is no small thing. It is a testament to how long and hard Gracias has been in lockstep with Musk. He was in before anyone knew if a private rocket was going to fly, and he has been involved in the operation ever since.
It is a long road for him. He put together MG Capital, what would become Valor, in 1995 while he was at the University of Chicago for law school. Since then he has been one of Musk’s top confidants, a Tesla director for 14 years and a constant in his orbit.
If you are keeping an eye on the details, here is the lay of the land:
– $135 a share is the going rate for the IPO
– We are talking a $1.77 trillion target
– Up to $75 billion in potential capital
– 42 per cent of the pie is Musk’s
– And about $65 billion for Valor
From the ground up
Musk has said as much: he has had Gracias’s full support, even in the dark days when it seemed like the end for SpaceX. He calls him a friend. You saw the same with Tesla, with Gracias in the trenches with the teams.
He was also part of the financing for the 2022 buyout and the reorganisation that followed. It’s a formula: put in the money, do the work, and stick with it. The SpaceX offering is about to put that to the test on a grand scale.
Why you should be paying attention
This is more than a pat on the back for the old guard. It is a chance to see if a company of this size can open up to more than the usual institutional set. Thirty per cent for the retail side, if they pull it off, is a new way of doing business for a hot IPO.
It makes you wonder about the competition in the growth equity and venture world. Having your ear to the ground and the patience to see out a 2008-style crisis gives you an advantage. Should the numbers hold, Valor has set the standard for late-stage money.
In the end, it comes down to how it is done. The employee payouts, the unusual amount of stock for the public, the sheer size of it – it will tell you how the market takes to a $1.77 trillion entity. For Gracias and his firm, it is the culmination of a lot of behind-the-scenes work in one defining moment.
