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Comment by vs2 | Hacker News Reader

Ouch 20million for a drunken tweet

Elon is worth $20b [1]. $20m is 0.1% of his net worth. That's like a $1000 fine for someone who has "only" $1m. I have quite a bit less than $1m and a $1000 fine, while not nothing, would make me cranky for a week or a two but have almost no material impact on my life.

You can’t make these statements. Net worth is not the same as liquid assets.

Most of his net worth is likely tied up in stock. Which he can’t exactly sell.

He can take out a loan. It's easy, he has all those stocks to leverage against.

What interest rates do rich people like him get? Is the concept of charging interest still valid at that level or is it all bartering of favours?

I couldn't tell you what interest rate he's likely to pay but in general in this situation, there is interest. Whoever lends him the money has their own cost of funds and admin costs to cover at a minimum, even if they view repayment as close to zero risk because the collateral is very good.

You can get an upper bound by looking at published interest rates for brokerages, e.g.: https://www.interactivebrokers.com/en/index.php?f=1595

You can easily reach 1% or below at that asset level. It’s effectively free.

You can also negotiate a payment plan with the government, depending on your financial situation.

actually there is already a lot of loans against the company, I don't think you can leverage to infinity.

As far as I heard, he is already heavily leveraged against his stock in multiple loans that total into the billions. And his side of that deal just lost quite a bit of substance due to TSLA shares losing value, with a lot more of largely empty space (= high premium assigned to the stock price by investors due to perceived potential) to possibly fall until the bottom comes.

Citation?

https://www.forbes.com/sites/jimcollins/2018/05/18/musk-has-...

Thanks

That story tries to sell a darker picture than it really is. 40% of his stock is leveraged, which still only amounts to about $4B (less than that) of his $20B net worth.

Larry Ellison has a $11B line of credit leveraged against 30% of his Oracle shares. This is a non-story.

Genuine question: he presumably has $20m of Tesla stock he can sell tomorrow if he wants. Since it's a public stock. Or $2m/day for the next two weeks. So what do you mean?

Sure he's not gonna sell all his stock... but in this particular case, it feels like a distinction without a difference.

He'd never sell Tesla stock over a $20m fine. It's an important difference as far as he's concerned, because he has openly held a position of not selling his Tesla stock. It's a confidence issue with Tesla and its shareholders.

People in his position often borrow against assets via credit lines or similar instead. He's carrying an $890m misc liability in his wealth analysis by Bloomberg (13.8m shares pledged against personal obligations).[1] That's Musk borrowing for any variety of expensive life purposes (such as putting $100m into the Boring Company), specifically so he doesn't have to sell equity. An obviously slightly risky move when SpaceX is private and Tesla is volatile and unprofitable.

Larry Ellison as one famous example, had a large credit line against his Oracle stock and used it to buy real estate, live lavishly etc. Eventually the liability got big enough - several billion dollars - his accountant strongly encouraged him to pare it down and go on a budget. Ellison though now receives $500m+ per year in dividends from Oracle, and has since wiped out the large liability.

[1] https://www.bloomberg.com/billionaires/profiles/elon-r-musk/

The DOJ could still fuck his world up, like with Elizabeth Holmes after her SEC settlement.

it didn't help that the company was a fraud. Tesla is a viable business

Tesla is not a fraudulent business. It remains to be seen whether or not it's a viable business, IMO.

> a $1000 fine, while not nothing, would make me cranky for a week or a two but have almost no material impact on my life.

It's kind of bizarre how $1000 is an entire household's expenditures for an entire month in many countries..

Keeping it real, many people have ruined their lives over bad tweets.

Realer: countries have been ruined over bad tweets.

Any examples?

USA

Seriously? Anyone who couldn't think of THE PRIME EXAMPLE of the moment is either not paying attention to politics whatsoever or has an extreme political bias blinding them to the obvious excuse.

I'll give you one hint: the only world leader that has been laughed at openly by the UN general assembly.

Ruined, eh?

$40 million actually.

> Settlement Requires Musk to Step Down as Tesla’s Chairman; Tesla to Appoint Additional Independent Directors; Tesla and Musk Agree to Pay $40 million in Penalties

> Musk and Tesla will each pay a separate $20 million penalty. The $40 million in penalties will be distributed to harmed investors under a court-approved process.

And loss of the Chairman’s job!

...for three years, anyways.

It seems to say 40 million in the header.

Edit: 20 mil for Musk, 20 mil for Tesla.

$20 million from Musk, $20 million from Tesla.

The stock will surge on Monday. It cost them $0.

In fact, they’ll make a lot of money by removing the uncertainty.

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