Tesla’s stock closed down 15.46 percent today, as it continues its collapse to start the year, and now has fallen over 50 percent from its all-time high from December. Elon Musk’s wealth from Tesla as of this writing is now worth less than $100 billion, and that’s before you factor out the large number of shares he has put up as collateral in order to take out debt (AKA: leverage). In 2018, Jim Collins in Forbes detailed Elon’s leverage games from 2010 to 2017, and I dug into SEC filings to update his chart through 2024 (filings hyperlinked in the years in row 1). I also added another section of crude math below it to try to get a back of the envelope estimate of what Elon’s debt-load may look like. We don’t know what that number is, but multiplying the change in shares pledged from the previous disclosure times an average share price during that period gives you an idea of the maximum loan he could take out.

The thing that makes leveraging assets such a dangerous game is when they fall in value, the value of your debt does not fall with it. If the value of your leveraged assets falls to where your debt equals 80 percent of the asset’s value, your debt can be called in by the bank who loaned it to you. If you don’t have the cash to pay your debts, or the additional collateral to post to get you a healthier loan to value ratio under 80 percent (LTV), you have to crater your ownership in the asset by selling it to cover your debts (and if you are a large holder of an asset, simply selling it in bulk can crash the price, forcing you to sell even more of the asset to cover your debt). This is the game that Musk has been playing with Tesla, and the fact of all leverage everywhere is that based on fixed debt burdens, there are price points that leveraged assets can hit where their holders are forced to sell.

There are a couple dynamics that make this a very tricky exercise to try to guesstimate Elon’s debt burden. First, he has been accumulating millions of Tesla shares as he sells billions of dollars’ worth of Tesla stock while also putting up millions of Tesla shares as collateral for debt. This is all thanks to options that he is exercising at the same time he sells his core Tesla holdings. This means that in 2021 for example, Musk could sell $1 billion of Tesla stock at somewhere between $240 and $350 per share, but thanks to his options, he also bought back Tesla stock at just $6.24 per share.

Second, Tesla did a stock split in 2022, which means that the most recent numbers of shares owned do not cleanly relate to the past numbers of shares owned. Combine this with his options and all the stock sales and it makes for a murky picture of what Elon’s finances actually look like, but tracking changes in these SEC filings still gives us a ballpark idea of how leveraged Musk is, and the answer is potentially quite a bit.

He added the vast majority of his early leverage in 2018 to 2019, right before the Tesla share price went parabolic, and the bulk of his current debt burden likely came afterwards. Before 2019, Musk’s leverage ratio was in the thirties (his ratio of stock posted as collateral to owned stock), but from 2018 to 2019, it jumped from 39 percent to 54 percent. This change gives us an idea of what a lot of his leverage is worth in dollar terms, as we can zoom in on those prices and conclude he could have had $155 million in debts collateralized by his Tesla shares at a typical maximum 80 percent LTV. A more responsible posture of a 40 percent LTV would give him about $77 million in debts as of his 2019 disclosure.

Do we think Elon is responsible?

This is where it gets screwy, because in 2021, Musk warped this whole dynamic with stock options. From 2020 to 2021, his pledged shares towards collateral in these Schedule 14A disclosures ballooned from 18.46 million to 88.33 million, but his owned shares followed suit from 34 million to 170.4 million, and his leverage ratio actually decreased three percent from 2020 to 2021. He has since more than doubled the number of shares he owns while nearly tripling the shares he has put up for collateral.

While it’s very difficult to track his net worth through all this action, the one thing these SEC filings do give you a sense of is when Elon took this debt out, and it’s largely concentrated around his disclosures from 2019, 2021, and in 2023 when his leverage ratio recently jumped by 7 percent. His recent 2024 filing says he has the same number of shares owned and pledged as he did in 2023, so he has 238.4 million Tesla shares pledged as collateral as far as we know.

At current tanking Tesla prices, that collateral is worth a little over $50 billion, meaning that at an 80 percent LTV, he would currently be in trouble with about $42 billion in debts, while my basically worst-case scenario math puts him around $38 billion. I doubt he’s in this kind of trouble already, but this crude math demonstrates how precarious a situation he could find himself in depending on how dumb and reckless he’s been.

So Where Does Elon Feel Pain?

I have circled the two obvious price ranges that match up with his SEC filings on the Tesla chart below, and as you can see, we are already in the danger zone for the later one.

However, given that he sold $22 billion in Tesla stock in 2021, and the back of the envelope math suggests the increase in his pledged shares from 2020 to 2021 was around $20 billion, I think we can bypass that price range as a specific pain point, as he could already have the cash on hand to cover that portion of his debts. This leaves the two other obvious increases in debt to investigate: 2023 and 2019.

These are two different universes. The average Tesla price I worked off of for his disclosures in 2019 was $22.19 and for 2023 it’s $252.88. This is where the latter figure gets really tricky, as 2022 was a horrible year for Tesla. If Musk took on the 2023 disclosed debt at the bottom of the bear market in December 2022, the price he leveraged at could be as low as $123.18, a 50 percent reduction in the stock price relative to calculations. So while the 2023 increase in debt has the potential to be calamitous should Tesla return to somewhere around 2019 prices, it’s potentially not that bad for Musk right now, and if he did normal smart rich guy stuff, he should have the cash sitting in an interest-bearing account ready to cover that debt should the shit hit the fan.

But again, I ask, do we think a guy sued by his own shareholders for improper stock sales is responsible?

Assuming he is not responsible, the clearest pain point for Musk is in 2019. If there is any part of Musk’s leverage that is fissured to his basic livelihood, it’s likely everything from 2019 and before. He fundamentally changed the degree he leveraged his Tesla stock starting with that year’s disclosure, and every year after it he had an over 50 percent leverage ratio. While the average price I used for that year of $27.89 seems like it is impossibly far away (a 90 percent drop in stock price from today), that’s actually still expensive according to the Tesla bears determined to short it down to being valued like a car company. Some say that price is still twice as expensive as fair value.

Say Tesla does fall to the 2018 average price of $22.19 where I calculated his 2019 disclosed leverage at–Elon’s current pledged Tesla shares would be worth a little over $5 billion, meaning that over $4.2 billion in debts is where he gets into trouble at 80 percent LTV. Given that Musk’s net worth in December was nearly half a trillion and he’s sitting on $67 billion in Tesla option value as of this writing, taking on a debt burden of less than one percent of his maximum net worth is not that difficult to envision for apartheid South Africa’s preeminent ketamine enthusiast.

So the summary of this exercise is that there are clearly two leveraged Tesla’s for Elon Musk, and the nut to crack is how stupid he is. Assuming he’s not dumber than our immensely low expectations for him, where it likely gets nervy for his base of leverage is around the 2018-2019 range of $20 to $30 per share. If that is his danger zone, he has more than enough options to exercise to help collateralize his debts further to push his danger zone down lower on the chart, but the question is how many of those 303 million stock options would he be able/have to exercise and sell on that 90 percent drop first.

We know he has sold enough Tesla stock to cover his collateralized 2021 debts, but the 149.2 million shares he added to his debts from 2022 to 2023 is a big mystery at this point, mainly because we’re not quite sure how much of that had to do with his purchase of Twitter, a company he says is “barely breaking even.” Not to mention, a fair question given his delusion around Tesla’s real value is whether Musk bought his Tesla options with gains he made from selling Tesla stock. If so, that’s the kind of behavior that could reduce his cash levels and make his price point for serious pain much higher than the 2018-2019 range.

Any responsible rich guy would be able to deal with even the worst debt burden in my very crude calculations given how much Musk’s net worth rose from 2019 to December 2024 and how much stock he sold, but responsible is not exactly a term we associate with Elon Musk. Realistically, that pre-2019 price range for Tesla is where Musk actually starts sweating, but if he really fucked up, we are already living in the world where Musk’s debts are a significant percentage of his net worth–a net worth largely dependent on a stock currently collapsing in on itself like a neutron star.