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Rivian shares lost over half their value in the first quarter of 2022, forcing Amazon to take a big markdown on its stake in the electric vehicle company.
On Wednesday, Ford took a $5.4 billion loss on its Rivian stake.
Amazon invested more than $1.3 billion in Rivian as part of strategic partnership between the two companies.

R.J. Scaringe, Rivian’s 35-year-old CEO, introduces his company’s R1T all-electric pickup and all-electric R1S SUV at Los Angeles Auto Show in Los Angeles, California, November 27, 2018.
Mike Blake | Reuters

Amazon invested in electric vehicle maker Rivian in 2019 as part of a plan to go green. During the first quarter, it saw nothing but red.
In its earnings report on Thursday, Amazon took a $7.6 billion loss on its stake in Rivian. Shares of the EV manufacturer plummeted by more than 50% in the first three months of 2022, reversing course from the fourth quarter, when the company held its stock market debut and saw its value skyrocket.

While Amazon has big ambitions for Rivian, signing an agreement for the production of 100,000 delivery vehicles by 2030, current market conditions are rough. Rivian said last month that the company expects to produce just 25,000 electric trucks and SUVs this year, half of the number forecast to investors last year as part of its IPO roadshow.
Like most manufacturers, Rivian is battling through supply chain constraints and internal production snags. But Rivian was valued at $86 billion after its IPO pop, making the stock particularly vulnerable to a major pullback.

Arrows pointing outwards

Rivian’s drop in 2022

The Nasdaq Composite dropped 9.1% in the first quarter, its worst period since the first quarter of 2020, when the Covid-19 pandemic was beginning. The riskiest bets took the biggest hits as investors rotated into assets considered safer in a period of rising inflation and interest rates.
Rivian’s drop has continued into the second quarter, with the stock plummetting another 36%. It’s now more than 80% off its high from November.
On Wednesday, Ford took a $5.4 billion loss on its 12% stake in Rivian. Amazon has a roughly 18% stake, according to FactSet, investing a total of more than $1.3 billion into the company.

Read more about electric vehicles from CNBC Pro

Amazon’s markdown is particularly large, but it’s not the only tech company that’s taking a beating on its equity investments.
Earlier this week, Alphabet recorded a $1.07 billion loss on its investments “given market volatility.” Alphabet’s investment arms have backed companies including UiPath, Freshworks, Lyft and Duolingo, which have all gotten caught up in the market swoon.
Microsoft said this week that its first–quarter profit took a $174 million hit in part due to “mark-to-market losses on our equity portfolio.” And last week Snap said it had a $92 million unrealized loss “on investment that became public in H2 2021.”
WATCH: Rivian’s CEO confident the company can produce 25,000 vehicles this year

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Sixteen states on Thursday sued the U.S. Postal Service over its plan to replace its aging delivery fleet with thousands of gas-powered delivery vehicles over the next decade.
The lawsuits argue that the agency’s environmental analysis to justify spending up to $11.3 billion on the gas trucks, which only get 8.6 miles per gallon, was deeply flawed.
Postal Service spokesperson Kim Frum said the agency “conducted a robust and thorough review and fully complied with all of our obligations under” the National Environmental Policy Act.

Sixteen states on Thursday sued the U.S. Postal Service over its plan to replace its aging delivery fleet with thousands of gas-powered delivery vehicles over the next decade, alleging that the agency hasn’t adequately accounted for the environmental harm of the vehicles. They were joined by the District of Columbia, the City of New York and a Bay Area organization. Environmental and labor groups filed separate suits.
The lawsuits argue that the agency’s environmental analysis to justify spending up to $11.3 billion on the gas trucks, which only get 8.6 miles per gallon, was deeply flawed.

The Postal Service has about 230,000 vehicles, making up about one-third of the country’s entire federal fleet. Its plan to buy gas trucks would blunt President Joe Biden’s pledge to replace the federal fleet of 600,000 cars and trucks to electric power and cut the government’s carbon emissions by 65% by 2030. The administration has pledged to slash U.S. greenhouse gas emissions nearly in half by the end of the decade and transition the economy to net-zero emissions by 2050.

United States Postal Service (USPS) workers load mail into delivery trucks outside a post office in Royal Oak, Michigan, August 22, 2020.
Rebecca Cook | Reuters

In February, the EPA and the White House Council on Environmental Quality urged the agency to conduct an updated and more detailed technical analysis and hold a public hearing on its plan.
However, the Postal Service later that month completed a final regulatory requirement that would allow it to take delivery of the first of the new vehicles next year. The agency’s plan converts only 10% of its new trucks to electric power, far below pledges from Amazon and UPS, which have large fleets.
The lawsuit alleges the plan violated the National Environmental Policy Act and should be set aside. The suit argues that the Postal Service’s gas vehicles would stop states from achieving their own climate change pledges.
“The Postal Service has a historic opportunity to invest in our planet and in our future,” California Attorney General Rob Bonta said in a statement. “Instead, it is doubling down on outdated technologies that are bad for our environment and bad for our communities.”

“Once this purchase goes through, we’ll be stuck with more than 100,000 new gas-guzzling vehicles on neighborhood streets, serving homes across our state and across the country, for the next 30 years,” Bonta said. “There won’t be a reset button.”

More from CNBC Climate:

Despite the rise in electric vehicles sales in recent years, the transportation sector is one of the largest contributors to the country’s greenhouse gas emissions, representing about one-third of the annual total.
Postal Service spokesperson Kim Frum said the agency “conducted a robust and thorough review and fully complied with all of our obligations under NEPA.”
“We must make fiscally prudent decisions in the needed introduction of a new vehicle fleet,” Frum wrote in an email. “We will continue to look for opportunities to increase the electrification of our delivery fleet in a responsible manner, consistent with our operating strategy, the deployment of appropriate infrastructure, and our financial condition, which we expect to continue to improve as we pursue our plan.”
Joining the state of California in the lawsuit are the attorneys general of Connecticut, Delaware, Illinois, Maine, Maryland, Michigan, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Washington and the District of Columbia, as well as the City of New York and the Bay Area Air Quality Management District.
Two separate lawsuits were filed by environmental groups CleanAirNow, the Center for Biological Diversity and the Sierra Club, with legal representation from Earthjustice; and by the Natural Resources Defense Council with the United Auto Workers.

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It’s that time again! “Mad Money” host Jim Cramer rings the lightning round bell, which means he’s giving his answers to callers’ stock questions at rapid speed.

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Weber Inc: “I would not sell this thing … because it makes money.”

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Affirm Holdings Inc: “It doesn’t make money, I know, but it’s [chief executive] Max Levchin. Max Levchin will figure something out.”

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Business travel is making a comeback and could constrain already tight supplies of rental cars when it finally recovers, Hertz chief executive Stephen Scherr told CNBC’s Jim Cramer on Thursday.
“Corporate business is trending upwards, make no mistake about it,” Scherr said in an interview on “Mad Money.”

Business travel is making a comeback and could constrain already tight supplies of rental cars when it finally recovers, Hertz chief executive Stephen Scherr told CNBC’s Jim Cramer on Thursday.
“Corporate business is trending upwards, make no mistake about it. I’m confident that that starts to come back, and I think the in-bound visitor from outside the U.S. will start to come back when full relaxation of some of the Covid limitations are in fact in place,” Scherr said in an interview on “Mad Money.”

“When that happens, I think there’s more demand here then what we’re experiencing right now, and right now, this is a demand-supply issue, which is demand is outstripping the amount of fleet that the industry, no less Hertz, has,” he added.
Hertz reported better-than-expected earnings and revenue in its latest quarter, according to StreetAccount.
The rental car company said in its quarterly earnings call that it is “experiencing the impact of constraints on the supply of new vehicles as well as certain inflationary cost pressures,” and that issues with obtaining enough supply to meet demand could last into 2023.
However, the rebound of business travel is still in its early stages compared to leisure travel, Scherr said.
“If you just decompose demand, leisure traveler 90-some odd percent back relative to 2019. Business or corporate travel only 63% back. And …  non-U.S. travelers, so people coming from Europe or Asia into the United States, only 35% back,” he said.

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CNBC’s Jim Cramer said Thursday that Facebook parent Meta is a buy after the social media platform beat Wall Street expectations on earnings in its first quarter.
“While it’s too soon to be doing a victory lap here — the stock’s still down huge for the year — I feel like Meta Facebook’s turnaround efforts are already paying off,” the “Mad Money” host said.

CNBC’s Jim Cramer said Thursday that Facebook parent Meta is a buy after the social media platform beat Wall Street expectations on earnings in its first quarter.
“While it’s too soon to be doing a victory lap here — the stock’s still down huge for the year — I feel like Meta Facebook’s turnaround efforts are already paying off,” the “Mad Money” host said.

“Even after today’s jump, the stock sells for a ridiculous 17 times earnings. Now that the biggest fears are off the table, I think Facebook’s a good value play and I think it’s going to roll up. … Potentially if you can get it off the Amazon bad news tonight, do some buying,” he added, referring to Amazon’s earnings miss and gloomy forecast in its latest quarter.
Shares of Meta soared 17.6% on Thursday.
“The context for Meta Facebook is that almost no one expected anything good here,” Cramer said, citing headwinds including changes to Apple’s privacy rules, the rise of competitor TikTok and economic factors putting pressure on social media companies’ advertising revenue.
Cramer pointed to Facebook’s user growth to argue that the company is on the up-and-up. The social media platform’s number of daily active users was slightly above the forecasted number, according to StreetAccount.
He also said that the company’s planned slowdown in investments, success of its Tiktok-competing product Reels and Zuckerberg’s confidence in his social media business makes Cramer bullish on Meta.

“If there’s one thing Zuckerberg knows better than anyone, it’s social media. And hey, the numbers are already bearing that out,” he said.
Disclosure: Cramer’s Charitable Trust owns shares of Apple, Amazon and Meta.
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The Brooklyn Nets were supposed to be a superteam. After two playoff failures, they’re shaping up to be a cautionary sports business tale.
“It’s not good for the image of the team – subsequently, it’s not good for a sponsor,” said longtime sports marketing executive Tony Ponturo
The team is also searching for its third CEO in three years under owner Joseph Tsai.

The Brooklyn Nets’ Kyrie Irving (left) has a pat for teammate Kevin Durant as the Celtics were expanding their lead in the second half of Game Four of their first round NBA playoff series at Barclays Center in Brooklyn, NY on April 25, 2022.
Jim Davis | Boston Globe | Getty Images

The superstar-laden, super-expensive, super-hyped Brooklyn Nets were supposed to be a superteam. Instead, the otherwise lucrative NBA franchise is stinging from another early playoff exit and looking for answers as a costly offseason looms.
Since committing over $300 million to former NBA champions Kevin Durant and Kyrie Irving in 2019, the team hasn’t advanced past the second round of the playoffs. Earlier this week, they were swept out of the postseason by the Boston Celtics. Another of their highest-paid players, Ben Simmons, hasn’t played since the Nets traded away superstar and former league MVP James Harden for him. (Harden and the Philadelphia 76ers are still alive in the playoffs.) 

The team is also searching for its third CEO in three years under owner Joseph Tsai. Rival NBA executives describe the $3 billion organization as “dysfunctional.”
“The failure of the Nets,” veteran columnist Michael Wilbon said this week on ESPN. “It’s the biggest story in sports.”
There are still some business positives for the Nets. One NBA executive said the team should still feel bullish about adding business partners since Durant and Irving are marquee attractions, for instance.

This year, the Nets should also recover from a $25 million decline in revenue due to the pandemic. The team landed a league-high $30 million per year for its jersey patch ads. In February, Tsai noted the team “set franchise records for attendance, ticket revenue and sponsorships.” The team also collected two games’ worth of playoff revenue. That’s considered extra profit after regular-season revenue covers expenses. Ticket prices are going up, too.
But Brooklyn, the seventh most valuable franchise in the NBA, can’t afford to keep coming up short of sky-high expectations. Sponsors don’t like to be associated with franchises that fail to live up to the hype, said longtime sports marketing executive Tony Ponturo.

“It’s not good for the image of the team – subsequently, it’s not good for a sponsor,” said Ponturo, the former vice president of global sports and entertainment marketing at Anheuser-Busch. “You want everything to be positive and winning, and you certainly don’t want a team with high potential to fall flat on their face in the playoffs.”

Kevin Durant #7 of the Brooklyn Nets passes the ball as he is pressured by Jaylen Brown #7 of the Boston Celtics in the second quarter during Game Four of the Eastern Conference First Round Playoffs against the Boston Celtics at Barclays Center on April 25, 2022 in the Brooklyn borough of New York City.
Elsa | Getty Images

What went wrong in Brooklyn?

For the past two seasons, Brooklyn had the makings of a title-winning juggernaut, at least on paper. The New York Times Magazine wondered last year if the Nets – which featured the playoff-experienced superstar trio of Harden, Durant and Irving at the time – might end up the greatest team of all time. 
“We all got mesmerized by it,” one NBA executive said of the Nets. “And we were incorrect in assessing those guys as a real threat to the title. It’s the perfect example where marketing truly superseded substance.”
Instead, the now-departed Harden was injured, and the team lost in the second round of the 2021 playoffs. This year, the Nets traded Harden, who was with the team only for 80 games over two seasons, for Simmons. Simmons didn’t play, and the Nets finished seventh in the Eastern Conference, beating the Cleveland Cavaliers in a play-in game for the right to be swept by the surging Celtics.
Injuries were a factor, and so was Irving’s refusal to get the Covid vaccine. The Nets had initially banned Irving from playing, only to welcome him back after New York dropped its vaccination requirement. He played in only 29 out of 82 regular season games.
One of the executives described the Nets as “besieged by noise – the distractions, controversy, miscommunication” during Irving’s absence. It eventually led to their demise.
The NBA executives who diagnosed the Nets as dysfunctional spoke to CNBC on the condition of remaining anonymous since they’re restricted from discussing team affairs publicly. 

James Harden #1 of the Philadelphia 76ers looks to pass in the first quarter against the Toronto Raptors during Game Five of the Eastern Conference First Round at Wells Fargo Center on April 25, 2022 in Philadelphia, Pennsylvania.
Tim Nwachukwu | Getty Images

One of the executives said the decision to trade for Harden in January 2021 was the real turning point because it hurt the team’s depth. The Nets lost center Jarrett Allen, who went on to become an All-Star in Cleveland. Guard Caris LeVert and forward Taurean Prince were also traded.
“They bought the penny stock,” one of the executives said of the Harden deal. “They didn’t do the fundamentals, swung big, and it blew up.”
Now the Nets are stuck with the talented but troubled Simmons, who is owed about $112 million over the next three years, including $35 million next season. It’s unclear when the former All-Star will make his Nets debut. Simmons suffered a back injury and is still contending with mental health issues after his poor showing in the playoffs last year.
The Simmons situation “only creates more noise and distractions for the franchise,” the executive said.

Will Nets spend more money?

The Nets face other potentially costly roster issues this offseason, as well.
Irving needs to decide on a $36 million player option, but said he plans to return. One agent suggested to CNBC that guard Bruce Brown’s market value could eclipse $10 million per year after his stellar playoff performance. His salary now is roughly $4 million. Patty Mills has a $6 million player option, and center Nic Claxton is eligible for a new contract.
Nets operator BSE global has shown a willingness to pay the NBA’s luxury tax, which is a penalty the league applies after a team’s salary goes above a certain point. That money is then distributed to teams that don’t pay the tax.
For the 2021-22 season, the team’s estimated tax bill exceeded $90 million, second behind the Golden State Warriors’ tab, according to Spotrac, a website that tracks sports deals. That’s slightly higher than the previous season’s bill.
Next season, the NBA’s so-called soft salary cap will grow to $122 million, with the luxury tax threshold set at $149 million. The Nets’ total payroll stands at $187 million for eight players under contract, according to Spotrac. Expect that figure to grow.
Executives questioned how long Tsai, the billionaire co-founder of Chinese e-commerce giant Alibaba, would pay to chase what could be more early playoff exits.
“At some point, an owner looks at payroll and says, ‘This is unattainable.’ And that money isn’t going to a charity. That money is being dispersed to your opponents. Does he double-down and fund [the roster], even at a loss? And if you don’t produce the result – a championship – at some point, will it cost Sean?” an executive said, referring to Nets general manager Sean Marks.
Marks did not return a call by CNBC to discuss the matter.

Nets Owner Joseph C. Tsai and Clara Wu Tsai at the game between the Brooklyn Nets and Indiana Pacers on December 21, 2018 at Barclays Center in Brooklyn, New York.
Nathaniel S. Butler | National Basketball Association | Getty Images

Who is running the Nets?

The uncertainty has created a power vacuum, and one of the team’s stars has asserted himself. After losing to the Celtics, Irving suggested he would collaborate with Durant, Marks, and Tsai to “make some moves this offseason” and be “intentional about what we’re building and have some fun with it.”
On the business side, the Nets are seeking another CEO after John Abbamondi announced he’s stepping down effective this July. The move was a surprise since Abbamondi took over the role in July 2020 after current Genus Sports executive David Levy quit as Nets CEO in January 2020 following just five months on the job.
The departures created a sense of confusion about who is running the club and led to other pressure-packed questions. The franchise, for instance, will be scrutinized over whether it will hire a Black CEO.
The predominantly Black NBA has only three Black CEOs, down from a league-high seven in 2007. NBA Commissioner Adam Silver has acknowledged the diversity issue, saying the NBA “can do a better job” regarding hires among “CEOs on the business side of teams.”
Two league sources told CNBC the Nets already identified a candidate to replace Abbamondi. The Nets didn’t return a request for comment on whether the team’s CEO search included a Black candidate.

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CNBC’s Jim Cramer on Thursday advised investors to trust big-name executives – especially those at the helm of the major companies that just reported quarterly earnings.
“[They] don’t win every game, but over the long haul they win a lot more often than they lose, and counting them out is rarely a smart decision,” the “Mad Money” host said.

CNBC’s Jim Cramer on Thursday advised investors to trust big-name executives – especially those at the helm of the major companies that just reported quarterly earnings.
“You bet against these superstar CEOs and CFOs at your own peril. … [they] don’t win every game, but over the long haul they win a lot more often than they lose, and counting them out is rarely a smart decision,” the “Mad Money” host said.

“Too often stocks go down because people who haven’t done the homework are knocking them down for reasons that make no sense. Just because a stock is down, that doesn’t mean the decline is justified,” he said.
Cramer singled out five well-known business executives whose companies reported quarterly results recently, acknowledging that investors shouldn’t trust every business leader with a big reputation. 
“The world’s complicated, people are fallible, no executive deserves your blind faith,” he said.
Here are his thoughts on each company:
Alphabet

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“That’s [chief financial officer] Ruth Porat. Titan. If she says the quarter’s great and she explains it, you don’t just dismiss it. … You dismiss the clowns selling the stock,” Cramer said.
Meta

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“Facebook put aside billions to defeat TikTok; [CEO Mark] Zuckerberg only spent a fraction of that and he’s already created something better. … This is the guy the bears want to bet against? You can’t be serious,” he said.
Ford

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“Ford stock is one of the cheapest in the S&P 500. I’d be a buyer,” Cramer said.
Microsoft

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“Buying Microsoft into that foolish dip … was like stealing candy from an adult,” Cramer said.
Apple

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“A lot of people traded around the stock of Apple as usual because we heard bad things about supply problems, and China, and drab phones and slowing services. That’s people betting against [CEO] Tim Cook. … It’s Tim Cook, for heaven’s sake,” Cramer said.
Disclosure: Cramer’s Charitable Trust owns shares of Alphabet, Apple, Ford, Meta and Microsoft.

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Two-thirds of Elon Musk’s financing for the $44 billion deal to take Twitter private will have to come out of his own pocket. He has a net worth of about $250 billion.
Yet because much of his wealth is tied up in Tesla stock, Musk will have to sell millions of his shares and pledge millions more to raise the necessary cash.
According to research firm Audit Analytics, Musk has more than $90 billion of shares pledged for loans.
That makes him the largest stock-debtor in dollar terms among executives and directors, far surpassing second-ranked Larry Ellison, according to ISS Corporate Solutions.

Tesla head Elon Musk talks to the press as he arrives to have a look at the construction site of the new Tesla Gigafactory near Berlin on September 03, 2020 near Gruenheide, Germany.
Maja Hitij | Getty Images

The world’s richest person could soon add another title to his name – America’s most leveraged CEO.
Two-thirds of Elon Musk’s financing for the $44 billion deal to take Twitter private will have to come out of his own pocket. That pocket is deep. He has a net worth of about $250 billion.

Yet because his wealth is tied up in Tesla stock, along with equity in his SpaceX and The Boring Co., Musk will have to sell millions of his shares and pledge millions more to raise the necessary cash.
According to his SEC filings, Musk’s financing plan includes $13 billion in bank loans and $21 billion in cash, likely from selling Tesla shares. It also includes a $12.5 billion margin loan, using his Tesla stock as collateral. Because banks require more of a cushion for high-beta stocks like Tesla, Musk will need to pledge about $65 billion in Tesla shares, or about a quarter of his current total, for the loan, according to the documents.
Even before the Twitter bid, Musk had pledged 88 million shares of the electric auto maker for margin loans, although it’s unclear how much cash he’s already borrowed from the facility.

According to research firm Audit Analytics, Musk has more than $90 billion of shares pledged for loans. The total makes Musk the largest stock-debtor in dollar terms among executives and directors, far surpassing second-ranked Larry Ellison, Oracle’s chairman and chief technology officer, with $24 billion, according to ISS Corporate Solutions, the Rockville, Maryland-based provider of ESG data and analytics.
Musk’s stock debt is outsized relative to the entire stock market. His shares pledged before the Twitter deal account for more than a third of the $240 billion of all shares pledged at all companies listed on the NYSE and Nasdaq, according to Audit Analytics. With the Twitter borrowing, that debt could soar even higher.

Of course, Musk has plenty of cushion, especially since he continues to receive new stock options as part of his 2018 compensation plan. His 170 million in fully owned Tesla shares, combined with 73 million in options, give him a potential stake in Tesla of 23%, at a value of over $214 billion. The rest of his net worth comes from his more than 50% stake in SpaceX and his other ventures.
He received another 25 million options as part of the plan this month as Tesla continued to meet its performance targets. While Musk can’t sell the newly received options for five years, he can borrow against them.
Yet Musk’s 11-figure share loans represent an entirely new level of CEO leverage and risk. The risks were highlighted this week as Tesla’s share price slid 12% on Tuesday, chopping more than $20 billion from Musk’s net worth. Shares of Tesla were down less than 1% on Thursday afternoon.
Musk’s bet also come as other companies are sharply cutting back or restricting share borrowing by executives. More than two-thirds of S&P 500 companies now have strict anti-pledging policies, prohibiting all executives and directors from pledging company shares for loans, according to data from ISS Corporate Solutions. Most other companies have anti-pledging policies but grant exceptions or waivers, like Oracle. Only 3% of companies in the S&P are similar to Tesla and allow share pledging by executives, according to ISS.
Corporate concerns about excess stock leverage follow several high-profile blowups in which executives had to dump shares after margin calls from their lenders. Green Mountain Coffee Roasters in 2012 demoted its founder and chairman, Robert Stiller, and its lead director, William Davis, after the two men were forced to sell to meet margin calls. In 2015, Valeant CEO Michael Pearson was forced to sell shares held by Goldman Sachs as collateral when it called his $100 million loan.
Jun Frank, managing director at ICS Advisory, ISS Corporate Solutions, said companies are now more aware of the risks of executive pledging, and face greater pressure from investors to limit executive borrowing.
“Pledging of shares by executives is considered a significant corporate governance risk,” Frank said. “If an executive with significant pledged ownership position fails to meet the margin call, it could lead to sales of those shares, which can trigger a sharp share drop in stock price.”
In its SEC filings, Tesla states that allowing executives and directors to borrow against their shares is key to the company’s compensation structure.
“The ability of our directors and executive officers to pledge Tesla stock for personal loans and investments is inherently related to their compensation due to our use of equity awards and promotion of long-termism and an ownership culture,” Tesla said in its filings. “Moreover, providing these individuals flexibility in financial planning without having to rely on the sale of shares aligns their interests with those of our stockholders.”
The exact amount that Musk has borrowing against his shares remains a mystery. Tesla’s SEC filings show his pledge of 88 million shares, but not how much cash he’s actually borrowed against them. If he pledged the shares in 2020 when Tesla stock was trading at $90, he would have been able to borrow about $2 billion at the time. Today, the borrowing power of those shares has increased tenfold, so he could have room to borrow an additional $20 billion or more against the 88 million shares already pledged. In that case, only about a third of his Tesla stake would be pledged after the Twitter deal.
Yet if he’s increased his borrowing as Tesla shares have risen in value, he may have to pledge additional shares. Analysts say that if Musk has maxed out his borrowing on the 88 million shares (which is highly unlikely) and he has to pledge an additional 60 million shares to fund the Twitter deal, more than 80% of his Tesla fully owned shares would be pledged as collateral.
That would leave him with about $25 billion in Tesla shares unpledged. If he also has to sell $21 billion of Tesla shares to pay the cash portion of the Twitter deal, as well as the accompanying capital gains taxes, virtually all of his remaining fully owned stock would be pledged.
Either way, Musk will be putting a large share of his Tesla wealth at risk, which could make for a bumpy ride ahead for Tesla shareholders.
Borrowing against shares, Frank said, “exposes shareholders to significant stock price risk due to an executive’s personal financing decisions.”

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