Elon Musk Buys $10 Billion Tesla Shares, Stock Surges 8%

Elon Musk, the CEO of Tesla, has made a significant purchase of approximately $10 billion worth of Tesla shares through a revocable trust. This move has driven the stock to surge in pre-market trading, with an approximate 8% increase. The purchase was made at various prices, totaling around 2.57 million shares. This acquisition comes at a time when Tesla's board chair, Robyn Denholm, has been defending Musk's compensation package, which includes ambitious milestones for market value and performance.

Earlier this month, the company announced its intention to seek shareholder approval for a new compensation plan for Musk. If the ambitious milestones are met, the plan could be worth up to $97.5 billion. Prior to this purchase, Musk held approximately 13% of Tesla's shares. Musk's last public market purchase of Tesla shares was in February 2020, when he bought around 200,000 shares worth approximately $10 million. This latest purchase is his largest in terms of amount. In 2022, the year he acquired Twitter, he sold over $20 billion worth of Tesla shares.

This purchase is seen as a vote of confidence in Tesla's future prospects, following a challenging first half of the year marked by a 13% decline in global deliveries. Musk has consistently expressed optimism about Tesla's potential in autonomous ride-hailing and humanoid robots. Currently, Musk's net worth stands at approximately $419 billion, making him the world's wealthiest individual, according to the Bloomberg Billionaires Index.

Throughout the year, Tesla's stock has faced pressure due to declining sales and the impact of Musk's political activities on the brand. Additionally, the Trump administration's cancellation of certain electric vehicle incentives has contributed to this pressure. Analysts hold varying views on the stock. Data indicates that the consensus target price on Wall Street is approximately 20% lower than the current price. However, many remain optimistic about the long-term prospects if Musk successfully drives the company's transition towards autonomous driving, artificial intelligence, and robotics. Musk is also seeking shareholder approval for Tesla's investment in his latest venture, xAI.

Dan Ives, global technology research head at Wedbush Securities, described this internal purchase as "a huge signal for the bulls, showing Musk doubling down on his Tesla AI bet."