Tech Magnate Elon Musk invests a staggering $1 billion in Tesla shares, marking his initial stock acquisition since 2020.
Tesla's CEO Elon Musk Makes Billion-Dollar Investment, Signaling Strong Commitment to the Company
Elon Musk, the CEO of Tesla, has made a significant investment in the company, purchasing 2.55 million shares on September 12, 2021. The weighted average price per share was between $371.90 and $396.36, increasing his stake in Tesla by 0.62%. This move, according to analysts, seems designed to reassure investors and send a message that Musk is all-in on tesla stock's long-term growth.
Musk's latest purchase comes after a period of sliding stock market prices due to his public feud with President Donald Trump and the White House. However, the market reacted positively to Musk's purchase, causing tesla stock to surge more than 6%.
The Tesla board proposed a $1 billion compensation package for Musk in 2025, linked to ambitious company performance targets. This package is subject to shareholder approval in November 2025. If approved, it could potentially lead to significant financial gains for Musk if tesla stock performs well in the future. The compensation package for Musk is tied directly to stock market value milestones, meaning his payout depends heavily on Tesla's future stock market performance. If achieved, it could make the package the largest in corporate history.
Musk's direct holdings in Tesla are now 96 million shares, with indirect holdings totaling more than 413 million shares. The compensation package, if approved, will be based on Tesla reaching certain stock market value milestones in the future.
William Blair's Jed Dorsheimer sees Musk's purchase and Tesla's ongoing Robotaxi rollout as signs of strong confidence in tesla stock's future business. The recent surge in tesla stock follows these positive developments, with the company's stock currently trading around $420 per share at the time of writing.
Musk's last purchase on the open market was in February 2020. This marks the first time in over five years that he has made such a purchase. The purchase was made through the Elon Musk Revocable Trust.
The compensation package, if approved, will align Musk’s incentives with shareholder interests, aiming to ensure that the company's success benefits all stakeholders. The shareholder vote for the compensation package is scheduled for November 2025. As Musk's investment demonstrates, he remains committed to tesla stock's growth and success, and this commitment is likely to reassure investors as the company continues to innovate and push the boundaries of electric vehicle technology.
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