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Elon Musk sold Tesla stock to free up cash in case 'worst-case scenario' strikes. Here's why he's worried | Business Insider

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Elon Musk's reason for selling close to $4 billion of Tesla stock this month was to free up cash in case disaster strikes, he revealed in a Twitter Spaces conversation on Thursday. | BISouthAfrica

that if higher interest rates are compounded by a serious recession, he and his companies could suffer.

The higher cost of borrowing effectively increases the price of cars, meaning manufacturers have to cut prices to keep customers or bring more in, Musk said. As a result, rate increases tend to temper demand and eat into automakers' profits, which can weigh on their stock prices. As well as pointing to rates, Musk warned a severe recession would hammer sellers of big-ticket items bought on credit. In tough times, consumers will stop buying those products before giving up staples, he said.

 

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BISouthAfrica In case disaster strikes? Definitely knows something many don't. The world cup had ended... What follows with be harder tnan expected.

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