Does Mr. Musk have a lot of stock on margin? I thought he had cleaned up many of the loans he had taken out to pay for fuel for his airplane (I kid, he borrowed to maintain his entire lifestyle, not just the plane) and he didn't do much beyond giving himself a bridge loan for the Twitter acquisition, that's been paid off for a couple months, which is why the lenders on the Twitter deal feel they can ask for either more collateral (TSLA shares) or a buy-down by Musk of some of the bank debt.
He was well aware that getting a margin call was one of the ways those folks who really dislike what he is doing could actually do him some harm, in addition to calling him a poopyhead. The other way is to have the Obiden-Harris administration come after Tesla or Spacc-X; The Boring Co. and Neuralink not offering much leverage in the "Musk must be destroyed" festivities.
The third angle of attack on Musk is what I think of as the "Smear, slander, calumny and character assassination" approach. I can't really get into that very much beyond noting that there appears to be a coordinated echo chamber of the old journolist crowd and their mockingbird hangers-on and wannabes.
Anyhoo, from The Wall Street Journal, December 27:
How much money Elon Musk has in the bank suddenly has become a general societal concern. Fans, investors and employees of his non-Tesla businesses, including Twitter, realize that it’s Mr. Musk’s Tesla wealth that helps keep them afloat.
Tesla shareholders realize how much they have been supporting his other endeavors, which compete for his attention. In the latest news about one of the strangest corporate acquisitions ever, Twitter’s bankers are reportedly trying to reduce calls on Twitter’s faltering cash flow. How? By having Mr. Musk personally take over some of the company’s corporate debt, using yet more of his Tesla shares as collateral.
This would be a brave stand if it were really needed to preserve Twitter from bankruptcy. But things get complicated for two reasons: his board’s requirement that he put up $100 of Tesla stock for every $25 of borrowing, and Tesla’s epoch-making plunge, down another $14 on Tuesday. Mr. Musk gets blame from his most loyal investors for triggering the selloff because of his Twitter engagement, his Tesla stock sales, the potential for margin calls, and his off-color tweeting.
But an occasion for re-rating Tesla was coming anyway. The company has shed a monumental $900 billion in market cap and is still richly priced for a car maker with its growth prospects.
For years analysts justified its share price by saying Tesla wasn’t a car company, it was another Apple. Meaning what? Apple isn’t some free-spirited, uninhibited innovator spinning off new industries in all directions. It’s basically one thing, an iPhone company. Tesla is one thing, a car company. For a lot of reasons, profit margins on cars will never be as attractive as profit margins on iPhones. And just as no reason exists to believe Apple could dream up another money-spinner equivalent to the iPhone, no reason exists to believe Tesla will invent a product or service to transcend the competitive predicament of a car company.
I made myself unpopular years ago by pointing out that the established, union-employing companies dearest to politicians’ hearts would also be lured into making electric vehicles by the same subsidies that lured Tesla. These companies operate under an additional political dispensation, thanks to our fuel-economy regime, which lets them lose money on EVs to preserve the inflated pickup-truck profits they earn behind a 25% pickup import tax in place since LBJ.
Political favoritism has shifted against Tesla. Small example: The subsidized charging network the Biden administration is building devalues the competitive advantage Tesla created for itself by building its own charging network....
