This move makes it more likely that the internal number for TSLA is not good, and Elon is expecting the price to go down.
He has access to the real revenue number. If it's going well, he wouldn't have to perform this maneuver. xAI was relatively separated from X and TSLA, and wasn't having the backlashes associated with the two. Now he risks having the xAI branding tarnished too. He wouldn't do this unless the TSLA internal numbers are bad and he has to protect himself first, at the cost of xAI brand.
It's interesting in conjunction with the SEC/DOGE move.
For ever, companies wanted to cook their own profitability metrics - see the famous (pre-Musk) Twitter revenue per click or something, or adjusted by size of community.
Public company disclosure rules, however, dictate fairly strictly what is and isn't revenue, profit, capital and so on. Right now, you can publish any wacky statistics you like, so long as you also provide the GAAP ones - "generally accepted accounting practice".
But who knows, perhaps DOGE in SEC relaxes that, giving companies more scope to hide bits of their business they don't like.
xAI was seperated from X in what sense? xAI employees were X employees [1]. X reportedly had a stake in xAI, although The Verge says that hasn't materialized yet [0]. xAI's primary UI was X.
(This is primarily around your backlash comments, I'm sure some shareholder malarkey could make them technically separate).
I’m not an expert in this but as far as I can tell there will never be a margin call. There’s only a margin call if he defaulted on his loans. All the banks will do is ask to restructure the loan to compensate for the loss in the collateral.
Further, it’s just $6bn which musk can easily cover.
> The funding included $7 billion of senior secured bank loans; $6 billion in subordinated debt; $6.25 billion in bank loans to Musk personally, secured by $62.5 billion of his Tesla stock; $20 billion in cash equity from Musk, to be provided by sales of Tesla stock and other assets; and $7.1 billion in equity from 19 independent investors.
Same thing that happens if you put up any kind of collateral that later becomes worthless: the lender doesn't get their money. That's the risk of collateral.
This is why mortgage lenders require you to maintain insurance on your property: if the house burns down or something, the lender still wants that money. If a house gets destroyed in a way that's not covered by insurance (say, by an earthquake in California, where most people don't have earthquake insurance), then the lender loses their money. (The former homeowner probably stops payments and gets their credit ruined.)
But you do know “things” have a way to find path to get in public :-). Also, as stated in the following article, Tesla filed with SEC how much of stock was used and you can use the timing to find the stock price during the period of acquisition.
Elon sold 19B in stock, took a loan for 6.25B, and the rest was other investors.
The 6.25B loan, assuming he still has it, is really not an issue considering his net worth. He can add more collateral or sell a bit. In fact TSLA stock is higher now than when he bought Twitter.
> xAI was relatively separated from X and TSLA, and wasn't having the backlashes associated with the two.
I don't understand this point: why would these backlashes care about the on-paper separation? (I'm assuming by backlash, you mean that of public opinion, which already knows about the xAI-Musk association).
He has access to the real revenue number. If it's going well, he wouldn't have to perform this maneuver. xAI was relatively separated from X and TSLA, and wasn't having the backlashes associated with the two. Now he risks having the xAI branding tarnished too. He wouldn't do this unless the TSLA internal numbers are bad and he has to protect himself first, at the cost of xAI brand.