Trump took a shot at being a shady car salesman Tuesday during a press event for Tesla at the White House. The president posed for photos behind the wheel of a Tesla he apparently can’t drive with a grinning Musk, remarked with astonishment that “everything’s computer” in the futuristic vehicles, and even read from what appeared to be a sales pitch sheet listing prices for different Tesla models.
But it seems Trump’s rather unpresidential measures to boost Tesla’s floundering stock could serve a greater purpose: keeping the not-so liquid Musk from defaulting on his loans.
Musk acquired X for $44 billion in October 2022, borrowing roughly $13 billion from several banks, including Morgan Stanley, Barclays, and Bank of America. Musk’s loans had been “hung” on those banks’ balance sheets for nearly two years, longer than some unsold deals from the 2008 financial crisis.
In a 2024 SEC filing, Musk was listed as holding a whopping 238,441,261 shares of Tesla stock that were “pledged as collateral to secure certain personal indebtedness.” At the time, he held 715,022,706 shares in total, according to the filing, meaning that roughly one third of Musk’s shares were serving as collateral for his loans.
Here’s where Musk’s problem emerges: If the stock price goes low enough, the banks Musk borrowed from could force him to sell his shares.
“If Elon Musk were forced to sell shares of our common stock that he has pledged to secure certain personal loan obligations, such sales could cause our stock price to decline,” Tesla wrote.
It already seemed like Musk was going to have trouble paying back his loans for X. Last year, the social media company reported that its value had plummeted by more than half, to around $19 billion. When the banks formulated a plan to restructure the loan, X didn’t follow through, The Wall Street Journal reported at the time.
This story has been updated.
Read More Details
Finally We wish PressBee provided you with enough information of ( The Hilarious Reason Why Elon Musk Is Panicking Over Tesla Stock Value )
Also on site :