Elon Musk Wants to Give Every American Child a Share of SpaceX. Here's What It Would Cost -- and What It Means for Everyone Else Holding the Stock

Elon Musk just promised millions of people a gift. On Monday, the co-founder and CEO of Tesla (NASDAQ: TSLA) and Space Exploration Technologies (NASDAQ: SPCX) wrote in a post at X -- the social media platform formerly known as Twitter -- "Next year, I will give one of my SpaceX shares to every kid in America." He then added, "This will be the first of many."

It sounds good, particularly if you're one of those children about to receive the gift. But what will it cost, and who pays other than Musk?

Musk didn't add any other details. We can, however, make some reasonable assumptions about how this will work.

More than enough already in hand

Musk doesn't need to dilute existing shareholders by issuing new shares of SPCX to make good on his gift. Musk himself effectively controls or personally owns 6.4 billion A shares of the recently public company, in addition to 3.9 billion B shares. There's another 1.3 billion restricted B shares that could soon become his as well, plus 350 million more that he could purchase if he chooses to exercise his options.

For comparison, there are currently just over 72 million children under the age of 18 residing in the United States, according to The Annie E. Casey Foundation. Assuming Musk is using the same standard about who qualifies as a kid, he could give away a mere 1.8% of the 3.9 billion B shares he already owns and still fulfill his promise.

SpaceX and Tesla CEO Elon Musk. Image source: The White House.

His total net cost? At today's price, that's roughly $12 billion worth of SPCX stock, which, of course, is only a fraction of his estimated net worth of right around $1 trillion right now.

And it's almost certainly SpaceX's B shares that Musk intends to give away. Although he personally owns just a little less than half of the company, the A shares' voting power is 10 times that of B shares, effectively giving Musk 85% control of Space Exploration Technologies. He's not apt to give any of that up.

Barely a blip

As for what it means to every other SPCX shareholder, the answer is not a lot... at least not initially. Musk can personally afford to fund the entirety of this gift. No dilution is necessary.

Longer-term, though, there is a slight conceivable impact. This will put a single share of SpaceX stock in 72 million different investors' hands, with little clarity as to how or even whether selling it will be restricted. Hopefully, most of these recipients will hang onto it indefinitely and use it as a seed for a retirement nest egg. Many of them will likely sell it at their first opportunity, however.

Fortunately, nearly 100 million shares of SPCX trade hands every single day. The market should be able to absorb such a disruption without too much turmoil.

James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.