Elon Musk owes $ 507 million to banks that help Tesla to raise capital

Elon Musk, CEO of Tesla Inc., comes to New York, United States, on Thursday, April 4, 2019. SEC says Musk broke deal with the agency when he tweeted on February 19 that Tesla would do a half million cars in 2019, before tweeting a few hours later, that deliveries would only reach about 400,000.

Jeenah Moon | Bloomberg | Getty Images

Tesla Inc.'s CEO Elon Musk personally owes $ 507 million to Wall Street banks involved in Tesla's equity and debt sales, backed by his stake in the electric car manufacturer, showed a filing on Thursday.

The loan was disclosed in Tesla's prospectus on Thursday to increase up to $ 2.3 billion in new shares and convertible debt, and it was $ 1[ads1]17 million less than Musk's personal loans described in Tesla's earlier prospectus in 2017

Nevertheless, Tesla said that if the price of the shares falls and the banks force Musk to sell some of its shares, which could put further pressure on the stock.

Tesla skipped 4% after Tesla has announced capital acquisition plans, which reassured investors' latest concerns about Palo Alto, the California company, and pulled up the stock from two-year downs.

Musk, who owns 20% of Tesla, has taken personal loans from the Wall Street banks for years. A prospectus from Tesla 2017 showed $ 624 million in loan to Musk.

The filing on Thursday showed that Musk owes money to three banks that worked with the capital increase.

Goldman Sachs Group Inc has $ 213 million in outstanding loans to Musk, due to Morgan Stanley $ 209 million, and another $ 85 million to Bank of America Corp. Goldman was not mentioned as a personal lender to Musk in the 2017 filing.

These loans are supported by Musk & # 39; s shares in Tesla, currently worth a total of $ 8 billion. If Tesla's shares decline, Musk may be forced to sell some of these shares under loan terms, according to the Tesla filing.

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Mark Williams, a professor of economics at Boston University, said that investment banks could enter into conflicts of interest with their dealings with companies, their founders, and chief executives, and test the rules to separate separate businesses.

"This is especially true of Tesla where you have an aggressive and vocal CEO who is prone to pushing the legal limits and getting terms that may conflict with Goldman's interest policy," Williams said. ] Goldman and Citigroup Included, the top bookstores in Thursday's capital increase, both have "sell" reviews on Tesla's stock, which is unusual but not exceptional on Wall Street.

By the end of 2018, Musk and his trust had 13.4 Millions of Tesla shares pledged as collateral for personal debt, according to another filing, down from 13.8 million shares at the end of 2017.

Tesla, Morgan Stanley and Goldman Sachs refused to talk about the loans. manages leading loans to a quarter of the value of the shares pledged as collateral.

With Tesla repeatedly pushing back forecasts to win profits, shares have fallen 27% so far.

Musk plans to buy Another $ 10 million shares as part of the sale announced on Thursday.

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