A margin loan is a loan secured by stock. The advantage to the borrower is that you don't have to sell your stock to raise the cash. You offer it as collateral for the debt. The lender is secured, so the interest rate should be favorable.
The downside (and there's always a downside) is that if the value of the stock declines, the lender must have more collateral. This is a "margin call." In 1929, many investors were buying more and more stock "on the margin." When prices dipped, they had to sell. All that selling at once drove prices farther down, which caused more selling, which caused further declines in the stock price.
Musk's situation is particularly interesting because Tesla is now a private company. What's the stock worth? It's a very risky loan for the lenders. We'll see how it plays out.
Pedoman actually saved them though
A margin loan is a loan secured by stock. The advantage to the borrower is that you don't have to sell your stock to raise the cash. You offer it as collateral for the debt. The lender is secured, so the interest rate should be favorable.
The downside (and there's always a downside) is that if the value of the stock declines, the lender must have more collateral. This is a "margin call." In 1929, many investors were buying more and more stock "on the margin." When prices dipped, they had to sell. All that selling at once drove prices farther down, which caused more selling, which caused further declines in the stock price.
Musk's situation is particularly interesting because Tesla is now a private company. What's the stock worth? It's a very risky loan for the lenders. We'll see how it plays out.
Stable as a house. Of cards.
Aww, Wonkers are so knowledgeable and helpful.
Rye is always nice for sipping.
All advice and information guaranteed to be worth what you paid me for it!
I do appreciate your kind words!
Yes.
My cat needs new pants.
Now, now, be fair- he's a racist emerald heir.
Now I get it. Sink. Like the Titanic. Welcome aboard Elon.
Uh huh - be cautious, Musk and Dorsey are collaborative pals. https://davetroy.medium.com...
¡Buenos dias de los muertos Twitter! Oh, I see you got started without us.
It regrows hair too.
So I need to add binoculars to the lawn chair and popcorn list?
Will he add an upgrade, purchase required of course, where drivers can impulsively and repeatedly tap the up button from inside the car?
Because...that helps....
Still waiting for my 30 hour long account on Twitter to get unlocked.
Wonder that if I paid for it, that wouldn't happen?