Due to the possibility of a “mass panic” in the share market, billionaire Elon Musk is recommending against doing just what he personally has done: borrowing against the value of the stocks one holds.
“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,” Musk said in the All-In podcast released Friday. “You can get some pretty extreme things happening in a down market.”
When he acquired Twitter Inc. for $44 billion earlier this year, the chief executive officer of Tesla Inc. put up billions of his personal funds and burdened the corporation with $13 billion in debt.
According to Bloomberg News, a portion of the high-interest debt that Musk put on Twitter may well be replaced by new margin loans secured by Tesla equity which he would be solely accountable for repaying.
Tesla Margin-Loan Conversations Display Growing Tension on Musk, Bankers.
Furthermore, he dumped around $40 billion worth of Tesla stocks, which drove the stock to fall to a two-year low. After his most recent sales, Musk once more stated this week that he will cease selling assets, indicating that the pause may extend for around two years.
Interestingly, Musk’s warning—at least his second this month—comes after he has already pledged his Tesla assets. According to an SEC filing from April 2022, Musk held 92 million Tesla stocks guaranteed as collateral as of December 2020.
Throughout the podcast, Elon also restated his opinion that the economy is overdue for just a slowing economy and that it might be on a level with the intensity of 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 Q2 2024, that’s my best guess,” Musk said. “Booms don’t last forever, but neither do recessions.”
Recently, Twitter removed its #ThereIsHelp feature that assisted users in case they encounter any discrimination, racial, abuse, violence, nudity, or any sexual activity content.
Elon blamed the previous executives, who managed this department. However, after his acquisition, he terminated the department in half.
Elon’s dictatorship in and around Twitter has affected many users including celebrities and famous personalities. He declared in a tweet that he will only step down if he finds any ‘foolish’ successor.
