While searching for info on Elon's margin call exposure, I found these stated requirements, which are likely to be stricter than what he could get from Morgan Stanley. It makes me wonder if he is in compliance:
In order to mitigate the risk of forced sales of pledged shares, the Board has a policy that limits pledging of Tesla stock by our directors and executive officers. Pursuant to this policy, directors and executive officers may pledge their stock (exclusive of options, warrants, restricted stock units or other rights to purchase stock) as collateral for loans and investments, provided that the maximum aggregate loan or investment amount collateralized by such pledged stock does not exceed twenty-five percent (25%) of the total value of the pledged stock.
Peleton (2022): CEO John Foley resigned so he could have more flexibility to sell stonk or increase the amount pledged.
Chesapeake Energy (2008): CEO Aubrey K. McClendon sold 94% of his stonk to meet a margin call. (about 6% of outstanding shares)
FedEx (2020): Oh boy. FedEx doesn't allow BoD/executives to pledge stock for margin loans. But they will make exceptions on a case-by-case basis. They only made on exception, (then) CEO Fred Smith.
How it started:
"In accordance with our policy, Mr. Smith has established his financial capacity to repay the loan without resorting to the pledged shares. In the unlikely event such a sale were necessary, based on the 30-day average trading volume for FedEx shares as of August 4, 2014, it would take two days for the pledged shares to be sold in the open market. Furthermore, Mr. Smith’s unpledged share ownership is very substantial and would likely be able to prevent any margin call."
How it's going:
"As a result of the stock price decline during fiscal 2020, Mr. Smith was granted approval to pledge additional shares in March 2020."
That's what I'm trying to determine. I expect the answer will be that he already has had to sell to meet margin loan requirements because the stock declined quickly from a very high level. I also expect he took margin loans at lower prices, before the run-up.
Elon publicly stated he would not sell Tesla shares for two years. That could be technically correct while his broker sold shares to meet their margin loan terms. However, Tesla's policy would probably kick-in before an actual margin call. The complexity comes in when a lapdog board lets things like this slide.
In order to mitigate the risk of forced sales of pledged shares, the Board has a policy that limits pledging of Tesla stock by our directors and executive officers. Pursuant to this policy, directors and executive officers may pledge their stock (exclusive of options, warrants, restricted stock units or other rights to purchase stock) as collateral for loans and investments, provided that the maximum aggregate loan or investment amount collateralized by such pledged stock does not exceed twenty-five percent (25%) of the total value of the pledged stock.