Elon Musk Buys $1B in Tesla Stock After Pay Proposal
▼ Summary
– Elon Musk increased his stake in Tesla by purchasing $1 billion in company stock through an irrevocable trust on September 12th.
– This was Musk’s first open-market purchase of Tesla shares in over five years, following significant sales by him and other executives in recent years.
– The purchase comes after Tesla’s board proposed an unprecedented pay package that could make Musk the world’s first trillionaire if ambitious milestones are met.
– Musk currently holds a 13% stake in Tesla and has expressed wanting more control over the company’s direction and mission.
– Tesla faces challenges including increased EV competition, declining market share, and Musk’s warning of potential “rough quarters” ahead despite his focus on AI and robotics.
Tesla CEO Elon Musk has acquired $1 billion worth of Tesla stock, marking his first open-market purchase in more than five years. The move follows a recent pay proposal from Tesla’s board that could potentially make Musk the world’s first trillionaire if certain ambitious performance targets are met. This significant investment, executed through an irrevocable trust, signals Musk’s continued confidence in the company’s long-term vision amid a challenging period for electric vehicle sales.
According to regulatory filings, the transaction took place on September 12th and involved the purchase of 2.57 million shares. News of the acquisition prompted a more than 5 percent surge in Tesla’s stock price, helping push the company’s market value into positive territory for the year. This stands in contrast to Musk’s actions in 2022, when he sold over $20 billion in Tesla shares, a period that coincided with his acquisition of Twitter.
The timing of the stock purchase is notable, coming just over a week after Tesla’s board introduced a new compensation package for Musk. The proposed plan ties his earnings to a series of demanding milestones, including the production of one million humanoid robots, one million autonomous robotaxis, and the creation of $7.5 trillion in shareholder value. While Musk already holds a 13 percent stake in Tesla, he has expressed a desire for greater influence over the company’s strategic direction.
Tesla’s stock performance has been volatile throughout the year, reflecting increased competition in the EV market and concerns related to Musk’s public and political engagements. Recent data shows Tesla’s share of the U.S. electric vehicle market has dipped below 40 percent, as consumer demand slows and rival automakers introduce compelling alternatives.
Looking ahead, Musk is steering Tesla toward an increased focus on artificial intelligence and robotics, recently outlining a new master plan that places less emphasis on traditional car manufacturing. Still, he has warned investors to brace for “a few rough quarters” ahead, citing the phase-out of federal EV incentives and an anticipated further decline in sales.
(Source: The Verge)
