The billionaire Elon Musk.
The billionaire Elon Musk is warning warned against something he himself has done — borrowing against the value of securities one owns — because of the risk of “mass panic” in the stock market.
Elon Musk said, “I would really advise people not to have margin debt in a volatile stock market and you know, from a cash standpoint, keep powder dry,” in the All-In podcast released on Friday. “You can get some pretty extreme things happening in a down market.”
The billionaire put up billions of his own money when he purchased Twitter Inc for US$44 billion (RM194.68 billion) earlier this year and saddled the company with US$13 billion of debt. According to the reported data, Elon Musk’s bankers are considering replacing some of the high-interest debt he layered on Twitter with new margin loans backed by Tesla stock that he would be personally responsible for repaying.
Tesla Margin-Loan Talks Show Pressure Mounting on Musk, Bankers
The billionaire has also disposed of nearly US$40 billion of Tesla’s shares, a move that contributed to driving the stock to a two-year low. Following the latest sales, Musk again said last week he would stop selling shares, adding that the pause could last for two years or so.
The warning, at least the second made by Musk this month, is ironic given the billionaire had previously pledged his Tesla shares. Elon had 92 million Tesla shares pledged as collateral as of December 2020, according to an US Securities and Exchange Commission filing in April 2022.
During the podcast, Musk also reiterated his belief that the economy was overdue for a recession and that the slowdown could be similar to the scale seen in 2009.
“My best guess is that we have stormy times for a year to a year-and-a-half, and then, dawn breaks roughly in [the second quarter of] 2024, that’s my best guess, “The billionaire Elon Musk said. “Booms don’t last forever, but neither do recessions.”
Rahul Gandhi's opinion piece appeared in a national daily and sparked political uproar. Opposition parties…
In 2022–23, poverty under the revised $3.00 line stood at just 5.25 per cent in…
Five Maoists were killed in two separate encounters with security forces in Chhattisgarh’s Bijapur district,…
Canadian Prime Minister Mark Carney said the most populous country, with the fifth-largest economy, must…
The Reserve Bank of India (RBI) has frontloaded its rate cuts to support economic growth,…
PM Narendra Modi on Saturday called for urgent global action to build infrastructure that can…