Elon Musk warns of the risk of mass panic in the stock market

Current Twitter CEO Elon Musk recently made some interesting statements on the All-In podcast on Friday, December 23, 2022. Specifically, he warned listeners about taking out loans against the value of securities that ‘they own. According to Elon Musk, this could create a risk of “mass panic” on the stock market.

I would really advise people not to have debt on margin in a volatile stock market (…) From a cash point of view, keep the powder dry. You can get some pretty extreme things in a bear market “, he said in his remarks reported by Bloomberg.

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Tensions are rising between Elon Musk and his bankers

For information, Elon Musk invested several billions of his own money when he bought Twitter for $44 billion. He would have even burdened Twitter with a debt of 13 billion dollars. And according to reports from Bloomberg News, Elon Musk’s bankers would like to replace some of the high-interest Twitter debt with new margin loans backed by Tesla stock, for which Elon Musk would be personally liable.

Apparently, Tesla’s margin negotiations suggest that tension is rising between Elon Musk and his bankers. As a reminder, Tesla’s CEO has already sold nearly $40 billion in Tesla stock, sending the automaker’s stock to its lowest level in two years. But Elon Musk recently pledged not to sell any more shares for the next two years.

Elon Musk believes in a recession that will last until mid-2024

According to Bloomberg, this is the second time Elon Musk has issued this warning in December. However, the billionaire is known to indulge in this practice. A filing with the SEC in April 2022 revealed that Elon Musk held 92 million Tesla shares as collateral as of December 2020.

Elon Musk also said during the podcast that he believes the economy will face a recession similar to 2009. According to him, there will be “ stormy periods for a year to a year and a half. Then dawn will rise roughly in the second quarter of 2024 “. He adds that this is his best guess and that ” booms don’t last forever, neither do recessions “.

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