Tesla has old count of Musk’s pledged shares, key to margin loan

Twitter debt secured by this stock.
Tesla Inc. said Monday in a securities filing that it needs more time to file a regular disclosure ahead of its annual shareholders’ meeting.The company may also need to have another look at a closely watched section on Elon Musk’s pledged shares, which appears to contain out-of-date information.Tesla’s amended annual report shows the share count and options of key investors through Dec. 31, and other footnotes refer to dates in 2022. But the part breaking out Musk’s ownership, exercisable options and pledged shares refers to Dec. 31, 2020, the same date from last year’s annual report. The company had previously updated the figures through June 30.

Tesla didn’t immediately respond to a request for comment sent through its investor relations portal.

The number of Tesla shares pledged by its chief executive officer has taken on added importance because of the $12.5 billion margin loan he arranged to help finance his purchase of Twitter Inc. It requires Musk, 50, to pledge Tesla shares worth $62.5 billion. The debt is secured by that stock, which can be seized by lenders in the case of default.

The discrepancy itself won’t affect Musk’s Twitter deal. But after his sale of about $8.5 billion of Tesla stock last week, he had just enough Tesla shares remaining to secure the new facility, according to Bloomberg calculations, though it depends on the company’s share price.

That calculation assumes Musk has 88.3 million Tesla shares pledged to secure existing debt that would be unavailable for the margin loan — the figure as of June 30. An updated number should have been included in Monday’s filing.

It might be a coincidence that Musk had increased his pledged shares to the exact same figure he had a year earlier, though the old date in the same footnote would seem to suggest otherwise.

© 2022 Bloomberg L.P.

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