To Have Money To Build His Super Empire, Elon Musk Had To Take Ways No One Expected

By using risky financial measures, Elon Musk succeeded in getting enough money to operate three companies at the same time, including Tesla, SpaceX, and SolarCity. Since October 2014, SolarCity has offered investors with bonds worth $214 million issued by the company in order to raise capital for new projects. So far, the most bond owner of SolarCity is SpaceX, when they had bought 90 million bonds. It is remarkable that these two companies are owned by Elon Musk.

Beside buying bonds, Elon Musk has also a 475 million bank loan to buy shares of SolarCity and Tesla when these two companies need capital. This loan is mainly guaranteed by the of shares worth 2.51 billion in SolarCity and Tesla of Elon Musk. He is currently the biggest shareholder of SolarCity, SpaceX, and Tesla – the three that have a total value of nearly 50 billion dollars.

Not many CEOs dare to use their shares to guarantee for personal loans as this could pose a risk to other stakeholders and create conflicts of interest between the company and CEO.

According to the regulations of the US Securities Commission, if the company's shares price decreases, CEO would have to sell the shares or increase the bail for their loans. Experts said this kind of move could threaten Tesla's shares price in the future.

However, Elon Musk also explained, "If investors put money into my company, I must have the same responsibility to contribute my money. I cannot tell others to step into the boat but I sill stand on the shore".

"Importantly, the decreasing domino effect will not happen in case the shares price of one company, among the group of Tesla, SolarCity, and SpaceX, reduces," he asserted.

Elon Musk said his loans did not cause risks to shareholders, because their values are of less than 5% of his total asset, which is estimated to be of more than $ 10 billion. He can easily increase the bail for his loans if it is necessary.

Such risky tactics help Elon Musk to continuously get the recent amazing successes.

In just one week, 325,000 people made an order for the new Model 3 car of Telsa, making the shares of this automaker increasing by 75% since February 10th.

On April 4th, SpaceX surprised the whole world by successfully landing a missile on the Atlantic Ocean for the first time ever.

According to the latest financial statement of Tesla, Elon Musk owns a 27% stake in Tesla, which is equivalent to 9.36 billion dollars.

Despite being perfectly legal, the financial moves of Elon Musk are facing with some difficulties from the US Congress.

Some senators are concerned the money that SpaceX contracted with the US government may be used to help SolarCity.

SpaceX received $3.2 billion from the missile development contract with the US government. Therefore, the US Congress wants to make sure that not a penny of this money is misused to help SolarCity.

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