Tesla Inc CEO Elon Musk personally owes $507 million to Wall Street banks involved in Tesla’s stock and debt sale, supported by his stake in the electric car maker, a company filing revealed on Thursday.
The lending was revealed in Tesla’s prospectus on Thursday to raise up to $2.3 billion with new shares and convertible debt, and it was $117 million lower than the personal loans to Musk revealed in Tesla’s previous prospectus in 2017.
Still, Tesla stated that if the price of its stock drops and the banks force Musk to sell some of his shares, that could create extra pressure on the stock.
Tesla increased more than 4% after Tesla revealed capital raising plans, which soothed investors’ newest concerns regarding the Palo Alto, California company and pulled its stock up from two-year lows.
Musk, who controls 20% of Tesla, has taken personal loans from Wall Street banks for years. A Tesla 2017 prospectus revealed $624 million in loans to Musk.
The filing on Thursday revealed Musk owed money to three banks working on the capital boost.
Goldman Sachs Group Inc has $213 million in loans outstanding to Musk, where as he owes Morgan Stanley $209 million, and another $85 million to Bank of America. Goldman was not referred as a personal lender to Musk in the 2017 filing.
Those loans are backed by Musk’s shares in Tesla, presently worth a total of around $8 billion. If Tesla’s stock decreases, then Musk could be forced to sell some of those shares under terms of the loan, as per the Tesla filing.