By Kritika Lamba (Reuters) – Tesla shares jumped 6% in early trading on Monday after CEO Elon Musk disclosed his purchase of about $1 billion worth of the electric vehicle-maker’s stock, in the latest vote of confidence from the billionaire in the company’s future. The stock purchase – Musk’s first open-market buy since early 2020 […]
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Tesla gains as Musk’s $1 billion stock purchase reinforces confidence in EV maker
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By Kritika Lamba
(Reuters) – Tesla shares jumped 6% in early trading on Monday after CEO Elon Musk disclosed his purchase of about $1 billion worth of the electric vehicle-maker’s stock, in the latest vote of confidence from the billionaire in the company’s future.
The stock purchase – Musk’s first open-market buy since early 2020 – comes at a critical time for Tesla, as it races to hit its ambitious goals of transforming into an AI and robotics powerhouse while grappling with slowing car sales.
The move also reinforces Musk’s push for greater control over Tesla, and comes just over a week after the company’s board proposed a $1 trillion compensation plan for Musk, addressing Musk’s demands and setting out lofty financial and operational targets.
Musk had purchased 2.57 million shares on Friday, paying between $372.37 and $396.54 per share, according to a regulatory filing on Monday.
The move is “the clearest signal yet that (Musk is) slamming the accelerator on being all in again … the Tesla-Musk narrative looks firmly back on track after a shaky start to the year,” said Matt Britzman, senior equity analyst at Hargreaves Lansdown.
Musk has consistently demanded a bigger stake and increased voting power at Tesla, having said previously that he would prefer to build AI and robotics products outside of Tesla if he cannot get 25% voting power.
As of December, Musk held a roughly 13% stake, according to LSEG data.
While Tesla shares were rising for a third straight session on Monday, the stock has been among the worst performers in the “Magnificent 7” group of tech megacap stocks, having lost 2% of its value year-to-date, through last close.
Tesla’s recent quarterly results showed continued margin pressures at the company, amid softening EV demand, increased costs and competition.
Still, Tesla board chair Robyn Denholm on Friday dismissed concerns that Musk’s political activity had hurt sales, also adding that Musk was back “front and center” at the company after several months at the White House.
(Reporting by Kritika Lamba and Rashika Singh; Editing by Anil D’Silva)