A practice of Elon Musk and Tesla’s board raises questions about the company’s governance and the possible low valuation that private capital markets are putting on its shares.
At the heart of the issue is how the company’s CEO borrows money and whether he pledged an astoundingly large percentage of his shares — close to 7% of all outstanding stock — as collateral for a sum under 4% of the market value.
The question is also not just about Tesla, but all public companies where executives and directors might pledge stock for borrowing in ways that could affect the market caps of the corporations. Because this has been a potential and actual…
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