Tesla Inc. has pledged $44 billion (currently about RMB 302.72 billion) worth of Tesla stock to obtain personal loans, according to a shareholder proxy filed with the U.S. Securities and Exchange Commission on Thursday, Beijing time, April 7. In the future, he will be restricted by Tesla’s new policy.
Regulatory filings show that Musk holds about 411 million shares of Tesla stock, of which 238.4 million shares are pledged to obtain personal loans. Based on Tesla’s closing price of $185.06 on Thursday, those pledged shares are worth about $44 billion. Under Tesla’s previous policy, Musk could theoretically raise up to $11 billion in debt (currently about 75.68 billion yuan).
On Thursday, Tesla’s board amended its policy on pledged shares to specifically limit the total amount Musk could borrow against his shares to the lesser of $3.5 billion (currently about RMB 24.08 billion) or 25 percent of the value of the stock. Previously, Musk was not subject to such restrictions. The new policy also reduces the maximum amount that Tesla directors and executives (other than Musk) can borrow against the pledged stock to 15 percent of the value of the stock, down from 25 percent previously.
“In order to reduce the risk of being forced to sell a pledged stock, the Board of Directors has established a policy that limits the pledging of Tesla stock by our directors and officers,” Tesla said in the filing. The company noted in the proxy statement that the number of shares pledged “does not indicate the extent to which there may be actual borrowings on those shares as of that date, and the borrowings may be substantially less than the value of the pledged shares.” it
