Musk warns of dangers of margin loans
2022.12.09 02:14
Musk warns of dangers of margin loans
Budrigannews.com – (NASDAQ) Tesla In response to a Twitter question regarding the electric vehicle manufacturer’s stock performance, Chief Executive Elon Musk stated that it was “generally wise” to avoid using margin loans on any company when there are macroeconomic risks involved.
Musk tweeted late on Thursday, without naming any businesses, “When there are macroeconomic risks, it is generally wise to avoid using margin loans on any company, as stocks may move in ways that are decoupled from their long-term potential.”
According to a Bloomberg News report, Musk’s bankers are considering providing him with new margin loans backed by Tesla stock to replace some of the high-interest debt on his Twitter deal.
Musk secured $13 billion in bank loans and a $33.5 billion equity commitment to complete the acquisition of Twitter.
As of Wednesday’s close, there are widespread concerns regarding disruptions at Tesla’s factory in Shanghai. As a result, Tesla shares have lost more than 10% so far this week and are down over 56% for the year.
