Elon Musk risks margin call due to Tesla's stock decline

Elon Musk is facing potential financial trouble as Tesla's stock price falls. If the decline continues, he may have to sell some of his Tesla shares that he used as collateral for personal loans. Currently, Tesla shares are trading around $225.31, a significant drop of 41 percent this year alone. The decline in Tesla's stock has been attributed to weak global sales and increasing competition in the electric vehicle market. Additionally, Musk's connections to the Trump administration have led to protests and boycotts against the company. If Musk needs to sell shares to cover his loans, this could further lower Tesla’s stock price. A margin call occurs when a borrower doesn't have enough equity to meet their broker's requirements. In Musk’s case, if Tesla's stock falls below a certain price, he could be required to deposit more money or sell assets. Reports suggest that Tesla's stock would need to drop to around $114 for Musk to face a margin call. Musk has pledged over 238 million Tesla shares as collateral for his loans. He currently owns about 411 million shares, or around 12.8 percent of the company. It is unclear how many shares are being used as collateral or the exact terms of Musk's loans. Some industry observers warn that if Musk sells shares, it could lead to a further decline in Tesla's stock price. Tesla has stated that such sales could have negative consequences for their stock. Despite these challenges, many analysts remain optimistic about Tesla’s future. They believe the company is well positioned in the growing markets of autonomous vehicles and AI technology. Current stock price targets vary widely, with an average of around $340.25.