Tesla shares jumped after CEO Elon Musk disclosed a $1 billion stock purchase. Image credit: The Economic Times
(The Post News) – Tesla shares surged Monday after CEO Elon Musk announced a $1 billion purchase of more than 2.5 million shares, showing confidence in the manufacturer’s future.
Tesla stock rose more than 6% in early trading, to $428.40 at midday, after a filing with regulators of Musk’s purchase of 2.57 million shares on Friday. He acquired them at between $372 and $396 per share, his first open-market purchase since 2020 and his largest in dollar terms.
The acquisition raises Musk’s holding to about 15.8% of Tesla, further cementing his control of the company. The acquisition sends a powerful signal to Wall Street that Musk remains committed to Tesla as the company grapples with sliding sales, heightening competition, and investor concerns about Musk’s political antics.
This is a mammoth sign of confidence for Tesla bulls and means Musk is doubling down on his Tesla A.I. wager,” Wedbush global technology research head Dan Ives said.
Elon Musk Could Be the World’s First Trillionaire Through Tesla
Musk’s stock buy comes a week after the company’s board weighed a record-breaking $1 trillion compensation package for him. The plan would give Musk up to 12% of the manufacture’s shares if the company hits a string of wildly ambitious milestones, such as an $8.5 trillion market value, a figure well over twice as high as that of the richest company today, Nvidia.
To activate the first tranche, Musk would need to bring the company’s valuation to $2 trillion and at the same time deliver production and profitability targets. The package, should it be ratified by shareholders in the company’s Nov. 6 annual meeting, would make Musk the world’s first trillion-dollar executive.
The company’s year has been one of weakening sales, margin squeezes, and Tesla bashing linked to Musk’s close relationship with President Donald Trump. Detroit and Chinese competitors have also increased pressure, compelling the manufacture to expand increasingly into AI, robotics, and battery storage.
In spite of those issues, Musk’s billion-dollar acquisition has recharged the manufacture’s stock momentum, with the shares now set for a third consecutive daily gain.
Hargreaves Lansdown’s head of equity research, Matt Britzman, said the purchase was “the best evidence yet that Musk is going pedal to the metal on being all in once more … the Tesla-Musk narrative is well and truly back on track after a difficult beginning to the year.”
To investors, Musk’s surprise share purchase is reassuring and provocative at the same time: reassuring that the billionaire has faith in investing in the manufacture’s future and provocative to think that Tesla can achieve the sky-high expectations that will make him the world’s first trillionaire.
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