Should we be worried that Tesla, one of the biggest investors in solar energy has declared bankruptcy protection? That is a question that has been on people’s lips for quite some time now. It started when the stock price fell by seventy percent in a short period of time. And now that the stock has begun to rebound, many more questions are being asked. Here is a look at what might be in the works for Elon Musk and his solar energy firm, as well as what you can expect in the aftermath of this announcement.
First, what does this mean for shareholders? Well, if you are an investor in a company that has declared bankruptcy protection, you cannot sell your shares until after the process has been completed. In effect, you are locked in until the company can get itself out of trouble. That means that if you buy shares, you are potentially losing money! That is why you should understand the situation before you buy anything, including the stock.
What does this mean for Musk? It means that he is going to need to have more funds set aside to continue investing in solar energy while everything is resolved. At the moment, he has about $2.5 million in cash on hand. That is not going to be helpful if the stock falls by seventy percent in a matter of minutes!
Could this crisis affect him personally? There is no way to say what will happen if he gets into trouble with the SEC. What you can do, however, is to watch for any signs that he may have to step down as CEO of both Solar City and PayPal. Both of those companies are under scrutiny right now, and it could be bad news for them. They are both very public companies, after all, and they have already indicated some trouble in the past.
If the stock does indeed drop by that amount, then he will be greatly affected. He would have to sell off a large chunk of his stock just to make up for it and open up new positions. That could cause him to lose quite a bit of his personal net worth and wealth. That could also cause a serious rift between him and his siblings, as they are all probably concerned about how their father is doing.
The bottom line is that you need to understand how difficult it will be for him moving forward. He has already indicated that he is not concerned about the economic problems the country is facing, at least at this point. However, if the stock takes a hit, it will certainly affect his personal fortune and worth. That is something that he really has to think about, even as he tries to maintain a positive outlook on things.