Tesla Chief Executive Elon Musk bought approximately $1 billion of Tesla shares, his first open-market purchase in over five years, initiating a steep rally in the stock.
As per a U.S. Securities and Exchange Commission filing, Musk bought about 2.57 million shares on September 12 in 25 individual transactions. He paid between $372 and $396 a share, or about $389 on average. The action, carried out through the Elon Musk Revocable Trust, is Tesla's largest insider buy by value.
Tesla stock rose 6.6% on Sept. 15 to $422.25, with pre-market advances as high as 9%. The surge increased Musk's net worth overnight by effectively covering the cost of his investment.
Musk now owns approximately 13% of outstanding Tesla shares, worth around $250 billion. He has long advocated for more voting power, aiming for a 25% holding to consolidate his leadership as Tesla diversifies into artificial intelligence, autonomous taxis, and humanoid robots.
The timing is crucial. Tesla's board has put forth an unprecedented Musk pay package totaling as much as $975 billion if he delivers on ambitious 10-year targets. The goals include taking Tesla's market capitalization to $8.5 trillion from the present $1.3 trillion, rolling out one million robotaxis, making one million humanoid robots, and tripling profits more than 24 times over. Shareholders will vote on the package next month in November.
Musk's most recent open-market buy was in February 2020. He has been a net seller since, selling over $20 billion worth of stock to fund his 2022 Twitter (now X) acquisition.
While the insider buying betters faith in the future of Tesla, there are problems. The company has weathered falling sales, the impending sunset of U.S. EV tax credits, a $243 million Autopilot settlement, and European regulatory investigations. Political scandals about Musk's participation in the Trump administration have also taxed demand.
Nevertheless, the move is seen as a strong statement by analysts. Fifty percent of the 64 polled analysts now consider Tesla a buy or strong buy, pointing to its clean energy leadership, AI, and new car launches in spite of worldwide competition.
Investor chatter about X has been heated, with bulls envisioning major upside and skeptics doubting Musk's intentions. Some say it's a bet on Tesla's next chapter; others see it as an ego play.
In any case, the buy has sparked hopes. For fans, it means Tesla is underpriced. For detractors, it invites questions of timing and motive. For markets, it's a reminder of just how much sway Musk carries, and how he can move Tesla shares like nobody else.
