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While most people are aware of what stocks and shares are, there are far fewer who know the ins and outs of how they can be utilised in business transactions.
Comedian Trevor Noah highlighted this fact perfectly on his TV programme The Daily Show as he tried to figure it out in relation to Elon Musk’s deal to buy Twitter.
Beginning his monologue, the South African comedian began speaking about the stock market and how it is heavily influenced by the financial decisions of bankers and politicians.
Describing the whole thing as feeling “scammy”, Noah then went on to question the flaw of how Musk is able to use shares in Tesla as collateral in his Twitter deal.
“People argue that you cannot tax billionaires on the shares that they hold in a company, because it is an ‘unrealised’ gain,” the comedian said.
Noah continued, explaining that he understands the concept because although a billionaire’s stock may be worth that much, they don’t physically have that money and it could also crash at any moment.
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Given that, he then questioned why Musk is able to put up his Tesla stock as collateral when technically, he doesn’t have the monetary value of it.
Noah said: “Then Elon Musk offers to buy Twitter and then he says, in his offer, he goes ‘I’m putting up my Tesla stock as collateral.
“And I’m like, ‘so you do have it?’ Then he’s like, ‘no, no, no, I don’t have it. I’m just going to say its collateral’.”
The comedian then questioned how Musk is able to go to private equity firms and banks to borrow the money to buy Twitter, loaning it against his Tesla shares.
Noah said: “So you can buy a thing based on what you have? Yes. But when we want to tax you, you can say ‘I don’t have it’.”
He pointed out the hypocrisy between people who earn a normal wage being taxed, but billionaires with shares are able to avoid tax and still use their worth to acquire more money.
“But then if you have billions in shares, you can then use that as money to then get more money, but not get taxed on any money because you don’t have money.”
He received a big round of applause as it seemed people agreed with his sentiments that you shouldn’t be able to use shares that are “unrealised” as collateral.
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