Tesla CEO Elon Musk Boosts Stake With $1 Billion Share Purchase

Highlights

Elon Musk bought $1 billion of his own company’s stock on Friday, a regulatory filing revealed early Monday.

Buying shares outright is unusual for a CEO like Musk. It’s also rare for business leaders to purchase stock directly with their own money, rather than acquire shares through Elon Musk Tesla shares that let them buy shares at a fixed discount.

Tesla investors took the news as a sign that Musk is bullish on the company’s future and had no plans to reduce his own stake. Tesla $1 billion shares jumped 7% when markets opened Monday.

“This is a massive show of confidence from Musk, and the bulls love to see it,” said Dan Ives, a tech analyst at Wedbush Securities and a longtime Tesla bull. “It sends a very positive signal after what has been a volatile year for both Musk and Tesla shareholders.”

Buying $1 billion of Musk buys Tesla stock was also a relative breeze for the world’s richest person. Musk is worth $20 billion, according to the Bloomberg Billionaires Index, so the purchase was small change. The rise in Tesla’s share price on Monday also added about $8.6 billion to Musk’s net worth, more than erasing the cost of the buy.

Musk’s fellow Billionaire and Tesla board member Larry Ellison would also likely have no issue paying $1 billion for stock options in his personal capacity, but his net worth is some $60 billion more than Musk’s.

A Roller Coaster Year for Tesla

Tesla shares have surged and plunged in value in recent months. The stock more than doubled after the U.S. election, as investors bet Musk’s access to then President-elect Donald Trump would help the company, particularly in areas like self-driving vehicles and its plans for a robotaxi fleet.

But Elon Musk investment Tesla in mid-December and has been in a tailspin ever since. Shares have lost all of their post-election gains and are trading well below flat for the year in April.

Potentially $1 Trillion Pay Package

Musk sticks with Tesla this week for a proposed pay package that, if accepted, could eventually give him $1 trillion of Tesla stock options. Under the terms of the plan, Tesla’s board would grant Musk stock options if the company hits ambitious sales and valuation targets.