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Elon is worth $20b [1]. $20m is 0.1% of his net worth. That's like a $1000 fine for someone who has "only" $1m. I have quite a bit less than $1m and a $1000

Elon is worth $20b [1]. $20m is 0.1% of his net worth. That's like a $1000 fine for someone who has "only" $1m. I have quite a bit less than $1m and a $1000 fine, while not nothing, would make me cranky for a week or a two but have almost no material impact on my life.

threeseed 8y ago
You can’t make these statements. Net worth is not the same as liquid assets. Most of his net worth is likely tied up in stock. Which he can’t exactly sell.
- afterburner 8y ago
  He can take out a loan. It's easy, he has all those stocks to leverage against.
  - adtac 8y ago
    What interest rates do rich people like him get? Is the concept of charging interest still valid at that level or is it all bartering of favours?
    - tomatocracy 8y ago
      I couldn't tell you what interest rate he's likely to pay but in general in this situation, there is interest. Whoever lends him the money has their own cost of funds and admin costs to cover at a minimum, even if they view repayment as close to zero risk because the collateral is very good.
    - bdonlan 8y ago
      You can get an upper bound by looking at published interest rates for brokerages, e.g.: https://www.interactivebrokers.com/en/index.php?f=1595 https://www.interactivebrokers.com/en/index.php?f=1595
    - toomuchtodo 8y ago
      You can easily reach 1% or below at that asset level. It’s effectively free. You can also negotiate a payment plan with the government, depending on your financial situation.
  - nraynaud 8y ago
    actually there is already a lot of loans against the company, I don't think you can leverage to infinity.
  - Slartie 8y ago
    As far as I heard, he is already heavily leveraged against his stock in multiple loans that total into the billions. And his side of that deal just lost quite a bit of substance due to TSLA shares losing value, with a lot more of largely empty space (= high premium assigned to the stock price by investors due to perceived potential) to possibly fall until the bottom comes.
    - sjwright 8y ago
      Citation?
      - matwood 8y ago
        https://www.forbes.com/sites/jimcollins/2018/05/18/musk-has-heavily-leveraged-his-holdings-of-tesla-while-teslas-financial-leverage-has-jumped/#5a2834b77099 https://www.forbes.com/sites/jimcollins/2018/05/18/musk-has-...
        sjwright 8y ago
        Thanks
    - jhall1468 8y ago
      That story tries to sell a darker picture than it really is. 40% of his stock is leveraged, which still only amounts to about $4B (less than that) of his $20B net worth. Larry Ellison has a $11B line of credit leveraged against 30% of his Oracle shares. This is a non-story.
- crazygringo 8y ago
  Genuine question: he presumably has $20m of Tesla stock he can sell tomorrow if he wants. Since it's a public stock. Or $2m/day for the next two weeks. So what do you mean? Sure he's not gonna sell all his stock... but in this particular case, it feels like a distinction without a difference.
  - adventured 8y ago
    He'd never sell Tesla stock over a $20m fine. It's an important difference as far as he's concerned, because he has openly held a position of not selling his Tesla stock. It's a confidence issue with Tesla and its shareholders. People in his position often borrow against assets via credit lines or similar instead. He's carrying an $890m misc liability in his wealth analysis by Bloomberg (13.8m shares pledged against personal obligations).[1] That's Musk borrowing for any variety of expensive life purposes (such as putting $100m into the Boring Company), specifically so he doesn't have to sell equity. An obviously slightly risky move when SpaceX is private and Tesla is volatile and unprofitable. Larry Ellison as one famous example, had a large credit line against his Oracle stock and used it to buy real estate, live lavishly etc. Eventually the liability got big enough - several billion dollars - his accountant strongly encouraged him to pare it down and go on a budget. Ellison though now receives $500m+ per year in dividends from Oracle, and has since wiped out the large liability. [1] https://www.bloomberg.com/billionaires/profiles/elon-r-musk/ https://www.bloomberg.com/billionaires/profiles/elon-r-musk/
cma 8y ago
The DOJ could still fuck his world up, like with Elizabeth Holmes after her SEC settlement.
- paulpauper 8y ago
  it didn't help that the company was a fraud. Tesla is a viable business
  - sokoloff 8y ago
    Tesla is not a fraudulent business. It remains to be seen whether or not it's a viable business, IMO.
Razengan 8y ago
> a $1000 fine, while not nothing, would make me cranky for a week or a two but have almost no material impact on my life. It's kind of bizarre how $1000 is an entire household's expenditures for an entire month in many countries..
deleted 8y ago
[deleted]

threeseed 8y ago

You can’t make these statements. Net worth is not the same as liquid assets. Most of his net worth is likely tied up in stock. Which he can’t exactly sell.

afterburner 8y ago
He can take out a loan. It's easy, he has all those stocks to leverage against.
- adtac 8y ago
  What interest rates do rich people like him get? Is the concept of charging interest still valid at that level or is it all bartering of favours?
  - tomatocracy 8y ago
    I couldn't tell you what interest rate he's likely to pay but in general in this situation, there is interest. Whoever lends him the money has their own cost of funds and admin costs to cover at a minimum, even if they view repayment as close to zero risk because the collateral is very good.
  - bdonlan 8y ago
    You can get an upper bound by looking at published interest rates for brokerages, e.g.: https://www.interactivebrokers.com/en/index.php?f=1595 https://www.interactivebrokers.com/en/index.php?f=1595
  - toomuchtodo 8y ago
    You can easily reach 1% or below at that asset level. It’s effectively free. You can also negotiate a payment plan with the government, depending on your financial situation.
- nraynaud 8y ago
  actually there is already a lot of loans against the company, I don't think you can leverage to infinity.
- Slartie 8y ago
  As far as I heard, he is already heavily leveraged against his stock in multiple loans that total into the billions. And his side of that deal just lost quite a bit of substance due to TSLA shares losing value, with a lot more of largely empty space (= high premium assigned to the stock price by investors due to perceived potential) to possibly fall until the bottom comes.
  - sjwright 8y ago
    Citation?
    - matwood 8y ago
      https://www.forbes.com/sites/jimcollins/2018/05/18/musk-has-heavily-leveraged-his-holdings-of-tesla-while-teslas-financial-leverage-has-jumped/#5a2834b77099 https://www.forbes.com/sites/jimcollins/2018/05/18/musk-has-...
      - sjwright 8y ago
        Thanks
  - jhall1468 8y ago
    That story tries to sell a darker picture than it really is. 40% of his stock is leveraged, which still only amounts to about $4B (less than that) of his $20B net worth. Larry Ellison has a $11B line of credit leveraged against 30% of his Oracle shares. This is a non-story.
crazygringo 8y ago
Genuine question: he presumably has $20m of Tesla stock he can sell tomorrow if he wants. Since it's a public stock. Or $2m/day for the next two weeks. So what do you mean? Sure he's not gonna sell all his stock... but in this particular case, it feels like a distinction without a difference.
- adventured 8y ago
  He'd never sell Tesla stock over a $20m fine. It's an important difference as far as he's concerned, because he has openly held a position of not selling his Tesla stock. It's a confidence issue with Tesla and its shareholders. People in his position often borrow against assets via credit lines or similar instead. He's carrying an $890m misc liability in his wealth analysis by Bloomberg (13.8m shares pledged against personal obligations).[1] That's Musk borrowing for any variety of expensive life purposes (such as putting $100m into the Boring Company), specifically so he doesn't have to sell equity. An obviously slightly risky move when SpaceX is private and Tesla is volatile and unprofitable. Larry Ellison as one famous example, had a large credit line against his Oracle stock and used it to buy real estate, live lavishly etc. Eventually the liability got big enough - several billion dollars - his accountant strongly encouraged him to pare it down and go on a budget. Ellison though now receives $500m+ per year in dividends from Oracle, and has since wiped out the large liability. [1] https://www.bloomberg.com/billionaires/profiles/elon-r-musk/ https://www.bloomberg.com/billionaires/profiles/elon-r-musk/

cma 8y ago

The DOJ could still fuck his world up, like with Elizabeth Holmes after her SEC settlement.

paulpauper 8y ago
it didn't help that the company was a fraud. Tesla is a viable business
- sokoloff 8y ago
  Tesla is not a fraudulent business. It remains to be seen whether or not it's a viable business, IMO.

Razengan 8y ago

> a $1000 fine, while not nothing, would make me cranky for a week or a two but have almost no material impact on my life. It's kind of bizarre how $1000 is an entire household's expenditures for an entire month in many countries..

deleted 8y ago

[deleted]