ELI5: Musk borrows money from banks for his companies. He uses his own stock in these companies as a collateral, which means that they bank can claim the stock from him if he fails to repay them in the long run. It also means that if the stock starts dropping in value, the banks can take it from him and sell it as a precautionary move, since if it dropped too much they would have nothing.
If the banks were to do this, in theory this would hurt the companies. Right there is where my understanding drops off. Can someone else finish the narrative? Why would the banks selling off the stock collateral hurt Tesla ? How is it any different from me selling my stocks and someone else buying them? How does Tesla lose anything there?
If the banks were to do this, in theory this would hurt the companies. Right there is where my understanding drops off. Can someone else finish the narrative? Why would the banks selling off the stock collateral hurt Tesla ? How is it any different from me selling my stocks and someone else buying them? How does Tesla lose anything there?