Submitted by AllinEmperor t3_1092iiy in wallstreetbets
Bloomberg said the question many investors ask now is when Elon Musk will be "foreclosed".
The report shows that as of March 2022, Elon Musk has mortgaged about 52% of his shares to borrow money. We don't know how much Tesla stock he pledges to fund Twitter. Investors can still rely on Twitter's $44 billion deal to predict some of Elon Musk's predicament.
Elon Musk borrowed $12.5 billion from a bank with a loan-to-value (LTV) ratio of 20%. In the event that the LTV reaches 35% or more, this founder will have to pledge more Tesla shares or pay to reduce the amount of debt if he does not want to be forfeited.
Based on the conditions from the Twitter contract, as well as the price of $ 359.2 per share as of March 31, 2022, Elon Musk may have pledged $ 96 billion of Tesla shares to borrow a capital of $ 19.2 billion. USD.
The threshold of 35% LTV is said to have been reached on October 14, 2022 when the share price of this electric vehicle company fell below 205 USD/share. To be able to return to 25% LTV, Elon Musk will be forced to pledge an additional $ 22 billion in Tesla shares to the bank or accept a partial loan payment equivalent to $ 5.5 billion.
Just a few weeks after the October 14 session, the Tesla founder sold $ 3.95 billion of Tesla shares even though it was in April and August 2022.
Right after Elon Musk sold shares to pay debt, Tesla's stock price continued to drop 19% as of December 12, 2022. This is also the time when Elon Musk sold another $ 3.6 billion of shares of the electric car company.
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Musk says "wise to avoid margin loans during macroeconomic risks"
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In theory, Elon Musk still owes the bank $11.7 billion in stock loans. If the stock price continues to fall, the founder will have to sell more if there is no other source of money to raise.
In the event that Elon Musk sells all the Tesla shares he is holding, this billionaire can only endure if the share price does not fall below $ 79 / share.
By the beginning of January 2023, Tesla's stock price had dropped to $101.81 per share, equivalent to a decrease of nearly 50% within 5 weeks.
Again, the number of bonus shares in 2018 valid from 2020 through many payments also did not help Elon Musk. Because under the agreement, they will not be allowed to trade within 5 years from the date of receipt.
26.6B is bonus shares.
My position:
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