Part 9/13:
Another critical aspect discussed is Elon Musk's financial leverage structure related to Tesla stock. Previously, Musk could borrow up to 25% of his pledged 238 million Tesla shares—equating roughly to $11 billion. This cap reduces the risk of a margin call, which could force Musk to sell significant shares rapidly, potentially causing stock volatility.
The reduction in Musk's borrowing capacity can be viewed positively by investors, as it decreases the likelihood of a forced sell-off that might depress Tesla’s stock price. Conversely, with a lower borrowing ceiling, Musk might opt to sell more shares voluntarily to raise cash, which could impact Tesla’s stock depending on the scale.