According to a recent report by The Wall Street Journal, a group of investors with deep ties to Elon Musk in Silicon Valley's startup circle are privately selling shares of Musk's companies like SpaceX and xAI, generating substantial profits. These transactions not only multiply the wealth of Musk's confidants but also open a rare investment pathway for the ultra-wealthy, forming a mysterious and closed "elite capital circle".
Close Friend Antonio Gracias Privately Sells Musk Company Shares
The report first highlights Antonio Gracias, a long-time close friend of Musk and founder of Valor Equity Partners, who is an early investor and board member of Tesla and SpaceX, participated in Musk's Doge project, and is closely connected with the Musk family, often spending holidays and traveling together, essentially Musk's most trusted "Doge close friend".
By investing in almost all of Musk's enterprises, from PayPal to Tesla, Neuralink, and The Boring Company, Gracias has gradually accumulated an astonishing fortune, becoming a multi-billionaire. However, according to transaction documents obtained by The Wall Street Journal, he has recently found another way to monetize: selling entry qualifications to wealthy outsiders using his rare shares.
The report indicates that Gracias recently sold SpaceX and xAI shares worth $1 billion through his private equity fund Valor Equity Partners to specific high-net-worth investors, with UBS assisting in marketing. Notably, the transaction threshold is extremely high, requiring investors to have at least $50 million in assets and invest no less than $1 million. Reportedly, Valor can collect a 1% management fee annually, and if SpaceX shares appreciate more than 8% each year, they can additionally receive a 20% "performance fee". UBS will also share part of the compensation as a marketing reward.
Mysterious Insider Trading Tactics: How to Avoid Disclosure Obligations?
The report further explains that the key to SpaceX and Musk's other enterprises maintaining their private company status, unlike many tech companies valued in the billions, lies in the design of their "insider stock circulation mechanism".
According to U.S. securities laws, a company with over 2,000 shareholders (excluding employees) must legally disclose financial information, essentially operating semi-publicly. SpaceX avoids crossing this line by selling shares only to internal personnel or trusted partners, who then use shell companies or special purpose vehicles (SPVs) to resell shares to other investors.
This way, the actual investors' names will not appear on SpaceX's official shareholder list, will not trigger information disclosure obligations, and the enterprise can maintain high financial confidentiality.
PayPal Team and MySpace Founders Also Ride the Tailwind
Besides Gracias, The Wall Street Journal also named several industry figures closely connected to Musk who have profited through similar methods:
- Luke Nosek: A PayPal co-founder, current SpaceX board member, and founder of Gigafund, reportedly purchased about $1 billion of SpaceX shares through secondary markets and charges investors management and performance fees.
- Josh Berman: MySpace co-founder, whose company Troy Capital acquired substantial shares during SpaceX employee stock circulation. According to SEC documents, his fund invested approximately $47 million in SpaceX in 2022.
- Justin Fishner-Wolfson: Founders Fund member with close ties to Musk and Peter Thiel, whose 137 Ventures fund continues to acquire shares in SpaceX and xAI.
- Emil Michael: Former Uber executive and potential Trump administration Defense Department nominee, whose public ethics declaration shows indirect ownership in SpaceX and xAI.
- Duncan Penn: Famous MTV host and close friend of Musk's brother Kimbal, who also invests through his Gatsby Management fund.
In short, most of these individuals are PayPal team members or have close personal relationships with Musk. They all leverage personal connections to ride the growth of Musk's enterprises, sharing massive rewards within a small circle. However, this closed, high-threshold trading model has raised questions about its fairness and transparency. As SpaceX and other companies continue to increase in valuation, this wealth feast led by Musk's confidants will remain a market focus.
