Economy Musk's personal borrowing is also increasing at Tesla Stock...

Musk’s personal borrowing is also increasing at Tesla Stock Surging

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(Bloomberg) – Tesla Inc. may sell more shares to fund global expansion, but the billionaire’s chief executive officer takes a different approach to his personal cash needs: he lends it.

Elon Musk has $ 548 million in personal loans from Morgan Stanley, Goldman Sachs Group Inc. and Bank of America Corp.

Tesla will sell approximately $ 2 billion of common stock to fund the investment, the electric vehicle maker said in the file. 48-year-old Musk and his colleague Larry Ellison, a member of the company’s board of directors, have vowed to personally buy shares of $ 10 million and $ 1 million, respectively.

Read More: Tesla plans to sell $ 2 billion weeks after Musk has indicated no need

The recent rise in Tesla stock, according to the Bloomberg Billionaires Index, has helped Musk’s net worth increase by about 50% this year to $ 40.5 billion. In December he told a judge that he lacked the money. His holdings in Tesla and Space Exploration Technologies Corp. make up most of his assets and he hasn’t sold any of his Tesla shares in years.

Instead, he tapped banks for loans and used his share as collateral. Pledging stocks is one way to monetize equity without actually selling it. Most listed companies prohibit the practice for fear that it could affect a manager’s decision-making.

Tesla offers “flexibility in financial planning without relying on high cash compensation or the sale of company shares,” the board said in its proxy registration last year.

Musk has a long-term incentive award that could earn him more than $ 50 billion if all performance goals are met. He receives no salary or bonuses.

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In the meantime, the stock rally continues. Tesla shares rose 4.5% to $ 801.59 at 3:04 p.m. in New York.

– With the support of Dana Hull.

To contact the reporter about this story: Anders Melin in New York at [email protected]

To contact the editors responsible for this story: Pierre Paulden at [email protected], Peter Eichenbaum

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