Musk also reaffirmed on the podcast his view that the economy is ripe for a downturn, and that it might be on a par with the severity of the one experienced in 2009.
Digital Desk: Elon Musk is warning against borrowing money against the value of stocks one holds due to the possibility of a "mass panic" in the stock market, even though this is something he has done.
In the episode of the All-In podcast that was broadcast on Friday, Musk added, "I would advise folks not to have margin debt in a volatile stock market and you know, from a liquidity sense, keep powder dry." In a weak market, "Some very drastic things can happen."
When he bought Twitter Inc. for $44 billion earlier this year, the chief executive officer of Tesla Inc. put up billions of his funds and burdened the firm with $13 billion in debt.
According to Bloomberg News, some of the high-interest debt that Musk piled on Twitter may be replaced by new margin loans backed by Tesla stock that he would be personally liable for repaying.
Additionally, he sold nearly $40 billion worth of Tesla shares, which caused the stock to drop to a two-year low. After the most recent sales, Musk once more declared this week that he will halt selling shares, adding that the hiatus might extend for about two years.
Given that the billionaire has previously pledged his Tesla shares, the warning—at least the second delivered by Musk this month—is ironic. A filing with the SEC in April 2022 revealed that as of December 2020, Musk had 92 million Tesla shares pledged as security.
Musk also reaffirmed on the podcast his view that the economy is ripe for a downturn, and that it might be on a par with the severity of the one experienced in 2009.
In Q2 2024, Musk stated, "approximately," the dawn will break after a period of stormy times lasting a year to a year and a half. Neither recessions nor booms last indefinitely.
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