- Elon Musk lamented selling Tesla stock to purchase Twitter, and flagged the risks of margin debt.
- He made light of “The Big Short” investor Michael Burry deleting his Twitter profile this week.
- Musk has warned stock pickers they face a choppy market and potential recession.
Elon Musk has bemoaned selling Tesla stock to finance his Twitter takeover last yr, poked fun at Michael Burry of “The Big Short” fame for quitting the social-media platform this week, and warned stock pickers concerning the risks of leverage.
Selling Tesla for Twitter
A Twitter user, @WholeMarsBlog, joked on Thursday that they couldn’t imagine Musk had acquired Twitter.
“Me neither,” the Tesla, SpaceX, and Twitter CEO replied. “Sucks that I needed to sell a lot Tesla stock to accomplish that (sigh).”
Musk sold about $23 billion price of Tesla stock last yr, largely to finance his $44 billion Twitter purchase. The sales represent a significant chunk of his estimated $174 billion fortune as of Thursday’s market close.
Tesla shares have rallied 74% to $188 this yr, but still trade well below their peak price of over $400 in November 2021.
—Elon Musk (@elonmusk) February 3, 2023
Battling Burry
Burry has publicly bet against Tesla throughout the pandemic, and accused Musk in late 2021 of selling the automaker’s stock because he knew it was hugely overvalued. The Scion Asset Management boss, who has predicted a stock-market crash and prolonged recession lie ahead, ominously tweeted “sell” and deleted his Twitter profile this week.
“michael burry deleting his account each time he shorts the local bottom won’t ever stop being funny,” a Twitter user who goes by foobar wrote this week. Musk replied with a pair of emojis crying tears of joy, suggesting he didn’t take Burry’s departure from the platform too seriously.
Musk has previously labeled Burry a “broken clock” and teased him for betting against Tesla.
—Elon Musk (@elonmusk) February 2, 2023
Debt dangers
“In turbulent economic times, be wary of using margin loans to purchase stock,” Musk tweeted on Thursday. The billionaire was referring to investors borrowing against the worth of their shares and other securities to bolster their portfolios.
Musk considered but ultimately didn’t use a $12.5 billion margin loan to amass Twitter last fall. The choice could have spared him a margin call — a requirement from lenders to place up more collateral resulting from his Tesla stock plunging in value.
The close shave may explain why Musk has been underscoring the risks of margin debt in recent weeks, especially when investors face a volatile stock market and a possible recession.
—Elon Musk (@elonmusk) February 2, 2023