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According to the Tesla bylaws, you can only leverage 25% of your stock, so that's going to be a problem for him too https://www.sec.gov/Archives/edgar/data/131

by fooey 3y ago

According to the Tesla bylaws, you can only leverage 25% of your stock, so that's going to be a problem for him too https://www.sec.gov/Archives/edgar/data/1318605/000156459021022604/tsla-10ka_20201231.htm https://www.sec.gov/Archives/edgar/data/1318605/000156459021... > In order to mitigate the risk of forced sales of pledged shares, the Board has a policy that limits pledging of Tesla stock by our directors and executive officers. Pursuant to this policy, directors and executive officers may pledge their stock (exclusive of options, warrants, restricted stock units or other rights to purchase stock) as collateral for loans and investments, provided that the maximum aggregate loan or investment amount collateralized by such pledged stock does not exceed twenty-five percent (25%) of the total value of the pledged stock.

ksherlock 3y ago
Not a problem when you can ask your friends to rewrite the rules. My favorite story: FedEx doesn't allow BoD/executives to pledge stock for margin loans. But they will make exceptions on a case-by-case basis. They only made on exception, (then) CEO Fred Smith. How it started: "In accordance with our policy, Mr. Smith has established his financial capacity to repay the loan without resorting to the pledged shares. In the unlikely event such a sale were necessary, based on the 30-day average trading volume for FedEx shares as of August 4, 2014, it would take two days for the pledged shares to be sold in the open market. Furthermore, Mr. Smith’s unpledged share ownership is very substantial and would likely be able to prevent any margin call." How it went: "As a result of the stock price decline during fiscal 2020, Mr. Smith was granted approval to pledge additional shares in March 2020."
kortilla 3y ago
Right in your own quote, options were excluded so this doesn’t alter that.

by fooey 3y ago

ksherlock 3y ago

Not a problem when you can ask your friends to rewrite the rules. My favorite story: FedEx doesn't allow BoD/executives to pledge stock for margin loans. But they will make exceptions on a case-by-case basis. They only made on exception, (then) CEO Fred Smith. How it started: "In accordance with our policy, Mr. Smith has established his financial capacity to repay the loan without resorting to the pledged shares. In the unlikely event such a sale were necessary, based on the 30-day average trading volume for FedEx shares as of August 4, 2014, it would take two days for the pledged shares to be sold in the open market. Furthermore, Mr. Smith’s unpledged share ownership is very substantial and would likely be able to prevent any margin call." How it went: "As a result of the stock price decline during fiscal 2020, Mr. Smith was granted approval to pledge additional shares in March 2020."

kortilla 3y ago

Right in your own quote, options were excluded so this doesn’t alter that.