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They do. That's why they have a policy that you're not allowed to borrow more more than 25% the value of the stock > Tesla has a policy in place of letting dir
by bko 5y ago
They do. That's why they have a policy that you're not allowed to borrow more more than 25% the value of the stock
> Tesla has a policy in place of letting directors and officers only borrow up to 25% of the value of their stock. And Elon Musk has already pledged about 88 million shares against indebtedness, according to Tesla's 2021 proxy filing. That leaves him with only another 85 million shares to raise debt with.
https://www.barrons.com/articles/tesla-ceo-elon-musk-twitter-financing-51650118671?tesla=y https://www.barrons.com/articles/tesla-ceo-elon-musk-twitter...
- throwaway2037 5y agoGreat find! Is this normal policy at other companies? On the surface, it seems like a good idea. If you pledge 100%, and the company share price takes a dive, you might be inclined to do crazy things with the company to try to recove the share price!
- bombcar 5y agoSomething akin to it is common, and the SEC may even require "large shareholders" to file when they've encumbered their shares, but I don't know the details.
- belter 5y agoIt's about the downward pressure on the stock if he has to sell, not only because of highly visible profile but the amount of shares pledged :-)