Tesla’s stock jumped more than 8% in New York trading on Monday after CEO Elon Musk disclosed that he purchased more than 2.5 million shares worth roughly $1 billion through a trust. The purchase marks his first open-market buy of Tesla stock in over five years.
According to a regulatory filing, Musk acquired various amounts of shares (between $372 and $396 per share) for a total of 2.57M shares, marking the largest single purchase he has made since first investing in the company two decades ago. Musk’s last direct buy was in February 2020, when he spent $10 million to pick up 200,000 shares at about $50 apiece.
Investors interpreted the move as a strong vote of confidence in the electric vehicle maker he founded, fueling a pre-market rally of over $30 per share. Tesla’s stock opened at $428.05 on the NASDAQ. This momentum adds to what has already been a strong quarter for Tesla. Since hitting a low of $293.94 on July 7, the stock has gained more than 25%.
The company’s performance earlier in the year was less encouraging. Tesla faced backlash in the U.S. and Europe, where sales slowed amid controversy surrounding Musk’s close ties to President Donald Trump and his prominent role in the administration’s cost-cutting and jobs program.
The timing of Musk’s purchase is notable. Just a week earlier, Tesla announced plans to ask shareholders to approve a massive $975 billion compensation package for its CEO. The payout would be tied to Musk’s ability to deliver a sweeping turnaround strategy focused heavily on autonomous driving, artificial intelligence, and robotics.
To unlock the package, Musk must also drive Tesla’s market capitalization from its current level of around $1.3 trillion to an unprecedented $8.5 trillion. For perspective, today’s largest U.S. tech leaders — Apple, Microsoft, and NVIDIA — are valued between $2.6 trillion and $3.2 trillion. If those ambitious targets are achieved, Musk’s voting power would increase to between 25% and 29%, aligning with his previous statements that he would only consider steering Tesla more aggressively toward AI once his control was closer to 25%.
Tesla is set to hold its annual shareholders meeting on Nov. 6, where investors will vote on the new pay package. Musk is also aiming to persuade investors that Tesla should take a stake in his separate artificial intelligence startup, xAI.
Editorial credit: Mijansk786 / Shutterstock.com