The issue isn't bankruptcy, it's that Elon has funded his billionaire lifestyle by mortgaging his Tesla stock, and may face one or more margin calls depending on (a) whether Tesla stock falls below $625/share and (b) how much Tesla stock he is required to pledge as collateral or liquidate to finance his personal portion of the purchase price.
Additionally, as CEO of Tesla there are limitations on his ability to pledge his shares of Tesla stock. It's unlikely that he's anywhere close to that threshold, but that is something he needs to watch for.
Also, Musk cannot pledge or sell his SpaceX shares without prior government approval, as doing so would violate a number of requirements related to SpaceX's government contracts.
$625/share as the margin call level? As I understand it there are some documents saying how many shares he has on margin, but nothing about the triggers.
As CEO of Tesla there are limitations on his ability to pledge his shares of Tesla stock? What limitations? I thought his limit was "number of shares he held"
Musk cannot pledge or sell his SpaceX shares without prior government approval, as doing so would violate a number of requirements related to SpaceX's government contracts? What clauses in what contracts? There may be clauses that prevent him from transacting shares to non-US citizens, but in general?
$625 is an approximate number based on Matt Levine's reporting. It's not a fixed number; it is based in part on how many shares Musk has leveraged to fund his lifestyle. As the number is from last year and Musk has sold some stock since then and leveraged more stock, it's very likely the number has changed but nobody has done an in-depth analysis recently.
Yes, as CEO of a publicly traded company there are limitations on his ability to pledge his shares of that company's stock, and that limit is far less than "number of shares held." This is not a legal requirement; it is a de facto requirement relating to eligibility for the S&P 500 and of corporate governance requirements by many public pension funds and other large investors to buy a company's stock.
His Tesla collateral with Morgan Stanley was dropped two weeks ago (granted he has/had to come up with another $6B as I recall). But the issue I was replying directly to was a call to bankruptcy, I'm not claiming he can't be financially burned by this deal (seems pricey in the first place for a clown car that landed in a gold mine [1], especially in the macro context), I just don't see the path to bankruptcy specifically.
Additionally, as CEO of Tesla there are limitations on his ability to pledge his shares of Tesla stock. It's unlikely that he's anywhere close to that threshold, but that is something he needs to watch for.
Also, Musk cannot pledge or sell his SpaceX shares without prior government approval, as doing so would violate a number of requirements related to SpaceX's government contracts.