SpaceX stake could give James Murdoch a $7.5 billion payday

James Murdoch’s early investment in SpaceX could be worth as much as $7.5 billion after Elon Musk’s rocket company went public this year, according to Fortune. The estimate, based on public records and calculations by PitchBook, would put the possible windfall above the $2.2 billion Murdoch received from the 2019 sale of most 21st Century Fox assets to Disney.

Fortune reported that Murdoch, 53, invested an estimated $120 million in SpaceX before the offering, which it described as the largest IPO on record. PitchBook senior research analyst Franco Granda calculated that the holdings could now be worth between $6.573 billion and $7.44 billion, Fortune said.

How the estimate was made

The figures come from records in a 2023 Tesla shareholder lawsuit over Musk’s $56 billion compensation package, according to Fortune. Those records showed that Murdoch bought three blocks of SpaceX stock: two $50 million investments in 2019 and 2020 through a private investment vehicle thought to be Lupa Systems, and a separate $20 million personal investment in 2019.

Fortune said SpaceX’s IPO paperwork did not name Murdoch, but disclosed stock award details for chief financial officer Bret Johnsen that included a 2030 expiration date and a $4.40 stock value. Fortune reported that those data points helped analysts estimate the value of shares held before the IPO.

The valuation remains uncertain. Fortune said Murdoch may have sold shares, and it noted that SpaceX shareholders approved a five-for-one stock split in May, following Reuters’ report on that split. Fortune also said the exact purchase dates for Murdoch’s shares are not public.

A representative for Murdoch had no comment to Fortune. Blair Effron, a Centerview Partners partner who has advised the Murdoch family, told Fortune he would not speak as a friend of James Murdoch.

Murdoch’s break from the family business

Murdoch left Fox after Disney bought most of 21st Century Fox for $71.3 billion in 2019, according to Fortune. He later founded the New York investment firm Lupa Systems, which Fortune said has backed media, technology, arts and entertainment businesses.

Fortune linked the SpaceX gains to Murdoch’s broader split from his father, Rupert Murdoch, and brother Lachlan Murdoch. The New York Times and The Atlantic previously reported on the family dispute, including a Nevada probate fight over the Murdoch Family Trust.

According to Fortune, a probate commissioner ruled against a proposed change that would have removed voting rights from James Murdoch and his sisters Liz and Prue. After an appeal, Fortune said the parties reached a deal under which the three siblings each received $1.1 billion and agreed to give up stock in News Corp and Fox.

Murdoch’s connection to Musk dates to the late 1990s, court filings cited by Fortune said. Musk was then building Zip2, while Murdoch worked on digital operations at News Corp. Fortune reported that the two later reconnected after Murdoch ordered a Tesla Roadster, and Murdoch joined Tesla’s board in July 2017.

Fortune also reported that Murdoch has made money from Tesla shares held through trusts, citing SEC filings showing $107 million in Tesla share sales by JRM Rev Trust since last spring. Tesla itself owns nearly 19 million SpaceX shares, according to a Yahoo Finance report cited by Fortune.

Jon Miller, chief executive of TPG-backed Integrated Media and a former AOL chief executive, told Fortune that Murdoch has been a skilled global technology investor for decades. Brian Wieser of Madison and Wall told Fortune the possible SpaceX gain could be large, while cautioning that private-share wealth depends on whether holders can sell.

This story draws on original reporting from Fortune.