Re:Tesla Q1 2020 Update
by tgsovlerkhgsel on Wednesday April 29, 2020 @06:24PM
(#23025224)
Let's say this thing costs $200 per person, so $100k per party. Let's say he does this every day (or throws a 3.5x as lavish party twice a week), that's $36.5M per year. He can do this for 10 years and it will still literally be a rounding error in his wealth.
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Re:Tesla Q1 2020 Update
by gamblor956 on Wednesday April 29, 2020 @06:28PM
(#23025270)
Of his current wealth on paper, yes.
But almost all of Elon's wealth is in the form of his stock holdings, and stocks fluctuate in price. Moreover, his cash is almost all leveraged from his stock, and if the price collapses again, he could be wiped out by the margin call.
Re:Tesla Q1 2020 Update
by codeisawesome on Wednesday April 29, 2020 @09:09PM
(#23026456)
I want to read a book (or a few!) full of these dynamics of wealth - what it means to be paper wealthy, what leveraging that can do for your lifestyle, and why people live in fear of the margin call. Can I please ask you for any recommendations?
Re:Tesla Q1 2020 Update
by texasbigdata on Wednesday April 29, 2020 @09:21PM
(#23026516)
Or....he structured it as "let me borrow 60% of X, and here as some shares worth X as collateral.". Aka synthetically manufactured selling shared without actually doing it in order to fund his lifestyle.
Depending on the advance rate (the 60% in this case), someone will do that deal.
To take it to the absurd. If Elon wanted to fund his $35M daily party habit in the comment above, and he said to a bank "here is 3 billion in stock as pledged collateral which you can sell when the value goes to $500M but there's no recourse. Cool? Cool. " You would do that deal.
So the margin call concept does not seem realistic.