Tesla’s stock is soaring after CEO Elon Musk disclosed on Monday that he bought $1 billion worth of shares, signaling his commitment to the electric vehicle company.
Musk revealed his purchase of 2.57 million Tesla shares in a regulatory filing. The news caused Tesla’s stock to jump over 7% in premarket trading. After the market opened at 9:30 a.m. on Monday, the company’s shares were just below 7%.
The tech billionaire last bought stock on the open market in February 2020, paying $10 million for over 13,000 shares.
His latest and largest Tesla stock purchase suggests he is staying as chief executive for the long haul.
“It’s a huge vote of confidence from Musk, and the bulls love seeing this,” said Wedbush Securities tech analyst Dan Ives of Tesla investors, according to CNN. “It sends a positive signal after a very tumultuous year for Musk and Tesla shareholders.”
For months, Tesla has been struggling to generate sales due in no small part to Musk’s affiliation with the Trump administration. He has since severed his relationship with the president. Before their public breakup, anti-Musk protesters were vandalizing Tesla’s vehicles and dealerships.
In its second quarter, Tesla saw a 13% decrease in global deliveries compared to the same time last year. And just last month, Tesla’s market share slid to a new low of 38%.
Observing his company’s declining sales during the second-quarter earnings call in July, Musk warned Tesla “probably could have a few rough quarters” ahead. He also threatened to leave the company. To prevent him from quitting, Tesla leaders gave Musk about $30 billion in restricted stock last month and, more recently, offered a $1 trillion pay package.
TESLA OFFERS ELON MUSK UP TO $1 TRILLION PAY PACKAGE
The package’s awards are divided into a dozen batches and are entirely contingent on Tesla’s market performance over the next decade. If he can increase the company’s market value to $8.5 trillion, Musk can receive the $1.1 trillion pay package in full.
Approval for the unprecedented compensation plan is set to face a Nov. 6 vote among shareholders. Musk’s previous performance-based pay package, worth about $56 billion, was struck down by a Delaware judge last year because its amount was deemed excessive.