Tesla chief Elon Musk says wise to avoid margin loans during macroeconomic risks | Tech News

Tesla chief Elon Musk says wise to avoid margin loans during macroeconomic risks

Tesla chief Elon Musk said it was "generally wise" to avoid using margin loans on any company.

By:REUTERS
| Updated on: Dec 10 2022, 14:50 IST
Elon Musk Twitter Bankruptcy Talk: Timeline
Elon Musk
1/13 He’s told employees to brace themselves for long hours, that “the road ahead is arduous and will require intense work to succeed,” and said bankruptcy was possible. Here’s how the saga is unfolding: (Bloomberg)
Elon Musk
2/13 Oct. 27: Musk takes control- His first act is to fire the Board along with CEO Parag Agrawal, CFO Ned Segal, head of legal Vijaya Gadde and Counsel Sean Edgett. Musk forms advisory team that includes celebrity attorney Alex Spiro, VC David Sacks, Neuralink CEO and head of Musk’s family office Jared Birchall, investor Jason Calacanis, and partner of Andreessen Horowitz Sriram Krishnan. (Reuters)
Elon Musk
3/13 Oct. 28: Brands begin to take pause- As Musk plans to unban accounts and says he will charge for user verification, advertisers suspend ads. (AFP)
Elon Musk
4/13 Oct. 31: Top tweeters protest- Amid murmurings of plans to charge existing verified accounts, author Steven King tweets, “$20 a month to keep my blue check? F**k that, they should pay me. If that gets instituted, I’m gone like Enron.” (AFP)
Elon Musk
5/13 Nov. 1: Teams working around the clock- The product team works over the weekend on Musk’s idea to charge users for blue check marks. A photo of product director Esther Crawford sleeping on the floor of a conference room, trying to make the deadline, goes viral. Meanwhile, managers are asked to make lists of who can be fired. Employees print out their software code for review by Musk and engineers from Tesla, to determine if their contributions are worthy of keeping a job. (REUTERS)
Elon Musk
6/13 Nov. 3: Massive layoffs begin- A memo is sent to all employees telling them of imminent layoffs and to watch for an email with the subject line: “Your Role at Twitter.” Badge access to offices is suspended as 3,700 staffers receive word that they’ve been cut. Realizing employees essential for the continuity of the business have been let go by mistake, some are asked to come back. (AP)
Elon Musk
7/13 Co-founder EV Williams tweets, “Heart’s out to the tweeps getting laid off today.” Co-founder Jack Dorsey adds, “I realize many are angry with me. I own the responsibility for why everyone is in this situation: I grew the company size too quickly. I apologize for that.” (REUTERS)
image caption
8/13 Nov. 5-6: Musk responds to celebrity protests- Unrest grows on the platform over the weekend, particularly over the issue of impersonator accounts. Actress Valerie Bertinelli starts a movement of people changing their Twitter names to “Elon Musk.” Comedian Kathy Griffin joins the protest, finds her account locked. Then Musk announces, “Going forward, any Twitter handles engaging in impersonation without clearly specifying `parody’ will be permanently suspended.” (AP)
Elon Musk
9/13 Nov. 8: Musk sells more Tesla- Despite a previous vow not to sell any more Tesla stock, Musk sells an additional $3.95 billion, bringing the total sold in past year to $36 billion. (REUTERS)
Elon Musk
10/13 Nov. 9: Musk Blue tick mark- Blue check mark option becomes available for purchase, and immediately becomes a tool for impersonators. An account masquerading as Nintendo Inc. posts an image of Super Mario holding up a middle finger. (REUTERS)
Elon Musk
11/13 Tesla and SpaceX CEO Elon Musk, and a close cadre of advisers are considering a host of changes to the way Twitter is run and makes money. (REUTERS)
Elon Musk
12/13 Nov. 10: More key executives quit as Musk warns of bankruptcy- In his first meeting with employees, Musk tells them to brace for 80-hour weeks and requires everyone back in the office full time. He also says bankruptcy for the company is not out of the question if it doesn’t start generating more cash. Several executives in charge of keeping Twitter safe and accountable to its users quit, including chief information security officer Lea Kissner, chief privacy officer Damien Kieran and chief compliance Marianne Fogarty.. (AFP)
Elon Musk
13/13 Nov. 11: Verified accounts get “Official” tags- Twitter adds badges that say “offiical” to verified accounts in some places, though confusion abounds. More brands depart the platform. (REUTERS)
Elon Musk
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Elon Musk says wise to avoid margin loans during macroeconomic risks. (Reuters)

Tesla chief Elon Musk said it was "generally wise" to avoid using margin loans on any company when there are macroeconomic risks involved, in response to a question on Twitter about the electric-vehicle maker's stock performance.

"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," Musk tweeted late on Thursday, without naming any companies.

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The view comes as Musk's bankers consider providing him with new margin loans, backed by Tesla's stock, to replace some of the high-interest debt on his Twitter deal, as per a Bloomberg News report.

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Musk closed the Twitter acquisition with $13 billion in loans from banks and a $33.5 billion equity commitment.

Shares of Tesla have lost more than 10% so far this week, and are down over 56% this year, as of Wednesday's close, amid broad concerns around disruptions at its factory in Shanghai.

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First Published Date: 10 Dec, 01:28 IST
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