Elon Musk filed a Form 4 on September 15, disclosing a purchase of nearly 2.57 million shares in Tesla (NASDAQ: TSLA) at prices between $371-$396, totaling around $1 billion.
The shares were acquired via the Elon Musk Revocable Trust, and the move marks the CEO’s largest TSLA purchase ever by value and his first insider buy since 2020, when he bought 200,000 shares worth $10 million.
Following the news, the company’s stock was up nearly 8% in pre-market trading on Monday, September 15, as investors saw the purchase as a sign of confidence in the automaker following a rather volatile year.
At the time of publication, TSLA shares were trading at $417.66, +$21.71 (5,48%) today.
As the price jump suggests, Musk’s purchase could help stabilize investor sentiment amid some serious headwinds. In the past few months, Tesla shares have been under pressure following year-over-year sales disruptions tied to the Model Y changeover, political controversies, and reduced U.S. electric vehicle (EV) incentives under the Trump administration that led to a public feud between the CEO and the president.
The timing is also notable, as the company heads into a pivotal shareholder vote. On November 6, investors will weigh whether to approve a massive compensation package, potentially valued at as much as $975 billion if ambitious market capitalization targets are met. Ultimately, the plan is to bring Tesla’s market value to a staggering $8.5 trillion.
However, Wall Street still appears bearish. The consensus, based on 34 aggregated votes on market analysis platform TipRanks, sees the average price target for the stock at $313.62 for the next 12 months, signaling a nearly 26% downside from current levels.
Tesla bulls could thus be betting on Musk’s appeal to shareholders to approve an investment in his latest venture, xAI. Wedbush analyst Dan Ives, for instance, called the insider purchase a sign that the CEO is doubling down on his artificial intelligence (AI) wager.
“We believe Tesla and Musk are heading into a very important chapter of their growth story as the AI Revolution takes hold and the Robotaxi opportunity is now a reality on the doorstep,” said Ives on social media.
All in all, the board’s actions appear to suggest confidence in the EV giant’s future, while the market remains mixed, even as the company maintains strong financial health with a Current Ratio of 2.04.
