New Twitter boss Elon Musk, who was reigning supreme as the world’s richest billionaire until earlier this month, is now down to the second spot with a net worth $139 billion. The billionaire whose wealth has taken an over $100 billion hit this year has shared his thoughts on trading in the volatile stock market.
Musk, stating that neither booms nor recessions last forever, has warned people against doing something he himself has done – borrowing against the value of securities one owns – because of the risk of “mass panic” in the share market. “I would really advise people not to have margin debt in a volatile stock market and you know, from a cash standpoint, keep powder dry,” the Tesla, SpaceX, Twitter boss said in the All-In podcast released Friday.
You can get some pretty extreme things happening in a down market,” the billionaire said during the podcast while adding that when there are macroeconomic risks, it is generally wise to avoid using margin loans on any company, as stocks may move in ways that are decoupled from their long-term potential.
The 51-year-old also shared his belief that the economy is overdue for a recession. The economic slowdown could be similar to the scale seen in 2009.
Taking note of Musk’s advise to people, it must me mentioned here that the Tesla chief put up billions from his personal kitty to complete the acquisition of Twitter for $44 billion in October and saddled the company with $13 billion of debt. Bankers to the billionaire are looking at replacing some of the high-interest debt he layered on Twitter with new margin loans backed by Tesla stock that he’d be personally responsible for re-paying, according to Bloomberg News.
To complete the takeover of Twitter, Musk had also sold Tesla shares worth nearly $40 billion, a move that led the stock nosedive to a two-year low. Musk, however, recently indicated that he is done selling and will sell no more Tesla shares.
“I’m not selling any stock for 18 to 24 months,” Musk said during an audio-only Twitter Spaces group conversation on Thursday. The billionaire then said he wouldn’t sell Tesla shares for two years, but backtracked and said he would pause sales for at least one year.
“My best guess is that we have stormy times for a year to a year and a half, and then, dawn breaks roughly in Q2 2024, that’s my best guess. Booms don’t last forever, but neither do recessions,” the billionaire noted during the podcast.
