Tesla CEO and Twitter owner Elon Musk’s immense wealth and borrowing power are being tested as Tesla shares continue a rapid decline while he attempts to stabilize his $44 billion investment in Twitter.
that Elon Musk is facing financial pressure as Tesla stocks continue a downward trajectory and his $44 billion investment in Twitter has yet to pay off. Theor borrowing against them is being complicated by their rapid loss in value in recent months.
Tesla CEO Elon Musk unveils the new Tesla factory in Fremont, Calif., Wednesday, Oct. 27, 2010. The new Tesla factory is the former NUMMI plant. notes that Musk has largely been a cash-poor billionaire for most of his career, depending upon margin loans — borrowing backed by his Tesla shares — for personal expenses and business investments while retaining his shares.
Mr. Musk’s current Tesla holdings, not including exercisable options, total 424 million shares worth about $52 billion at Friday’s closing price of $123.15 a share. Simply put, if he could tap all of those shares as collateral under Tesla’s rules, he’d be allowed to borrow about $13 billion. That’s only a bit more than he planned to borrow in April as part of the original Twitter deal using just 40% of his shares as collateral, underscoring how his borrowing power has shrunken with the collapse of the car company’s share price. He later scrapped those proposed margin loans to fund the deal amid investor concerns over the risk.
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