SpaceX backer Valor Equity gives $8.5B in shares to its own investors

Valor Equity Partners, the VC firm founded by longtime Elon Musk backer and current SpaceX board member Antonio Gracias, has opted to give away a chunk of its SpaceX stock to its limited partner investors, according to an SEC filing spotted by Bloomberg.

Valor invested in SpaceX over decades, and entities controlled by Gracias owned more than 500 million shares at the time of the company’s IPO — second only to Musk, who owned more than 6 billion shares at the time. Rather than cashing out and distributing the proceeds to its limited partners, Valor handed over 8.5% of its holdings directly to them, worth about $8.5 billion, according to Bloomberg’s estimate. The SEC disclosure says Valor will still hold more than 460 million shares after the giveaway.

Transferring ownership of the shares directly, rather than selling them and distributing cash, could give Valor’s limited partners a tax advantage. It also avoids dumping a large block of shares onto the open market, which could flood the available supply and push the stock price down. SpaceX shares are already down about 10% since the company’s blockbuster IPO day.

Why it matters

Choosing an in-kind share transfer over a cash payout suggests SpaceX’s early backers are wary of adding sell pressure to a stock that has already slipped since its debut, even as they look to return value to their own investors.