Elon Musk returns focus to Tesla with record $1B stock purchase

Elon Musk bought about $1 billion worth of Tesla stock last week, a regulatory filing showed, lifting the electric-car maker’s shares by almost 6% in pre-market trading on Monday.

According to the filing released Monday, Musk acquired roughly 2.57 million Tesla shares at prices ranging from $371 to $396.

The buying coincided with Tesla chair Robyn Denholm defending the board’s choice to propose a possible $1 trillion pay package, contingent on Musk meeting tough goals over the next ten years. Denholm described Musk as a “generational leader” and said the best way to “optimise the future of Tesla” is to keep him in charge. Musk is the world’s richest person, with an estimated fortune of $419 billion.

Over the weekend, an interview with Pope Leo cited Musk as an example of extreme wealth that, he said, was eroding essential values. The pope said such fortunes were undermining “the value of human life, of the family, of the value of society.”

Open-market buys by Musk are rare

Data from Verity show his prior open-market purchase was about 200,000 shares worth roughly $10 million on February 14, 2020. By dollar amount, last week’s buying is his largest ever, according to Verity.

Earlier this month, Tesla said it would put to shareholders a compensation plan for Musk that could reach as much as $975 billion tied to a set of ambitious milestones. Before Friday’s buying, Musk held about 13% of the company.

The stock has struggled this year as sales weakened.

Some observers link part of the slowdown to Musk’s political activity, which they say has weighed on the brand, while the phase-out of certain electric-vehicle incentives by the Trump administration also removed a tailwind.

Analysts are divided. The current Wall Street consensus price target implies about a 20% drop from current levels, according to Tipranks.com. Others remain positive on the longer-term path if Musk can steer Tesla toward a heavier focus on autonomous driving, artificial intelligence, and robotics. He is also asking investors to authorize a Tesla investment in his new firm, xAI.

Musk’s investment signals renewed focus on Tesla A.I

Dan Ives, global head of tech research at Wedbush, said the insider buying “is a huge sign of confidence for Tesla bulls and shows Musk is doubling down on his Tesla A.I. bet.”

The compensation plan to be put to a shareholder vote in November carries an ultimate goalpost of an $8.5 trillion market valuation. Tesla’s market value stood at about $1.3 trillion at Friday’s close.

In recent remarks as reported by Cryptopolitan, Denholm pushed back on concerns that Musk’s political engagement has damaged the carmaker. She said he is free to participate in elections as he sees fit.

Denholm said the company is focused on its products and customers rather than the chief executive’s personal views. “What he does from a personal perspective in terms of his political motivations is up to him,” she said in an interview with Bloomberg Television. “From a politics perspective, obviously we’re in a democracy, so everybody gets to voice their points of view.”

Musk’s role in politics has stirred two main worries for Tesla. Some shareholders say it pulls his attention away from growing the business. Others contend his contrarian conservative stance and a tense association with President Donald Trump have turned off potential buyers and hurt the brand.

Operationally, global vehicle deliveries fell 13% in the second quarter. The once affluent, urban and climate-focused customer base has cooled. In a few instances, the backlash has crossed into crime, including sporadic arson and vandalism at stores and charging sites.

Tesla is also contending with an aging model lineup and tougher competition across the electric-vehicle market.

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