Elon Musk buys $1bn in Tesla stock, boosting shares amid pay proposal

Key topics:Elon Musk buys $1bn in Tesla shares after $1tn pay proposalTesla stock jumps amid recovery from earlier 45% slumpCar sales fall globally; optimism tied to robots and Musk’s leadership.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..By Craig Trudell, Esha Dey and Kara Carlson.Elon Musk responded to an unprecedented pay proposal from Tesla Inc.’s board by buying about $1 billion worth of shares, sending the carmaker’s stock soaring into positive territory for the year.The billionaire bought the shares indirectly through a revocable trust on Sept. 12, according to a regulatory filing released Monday. The purchase coincided with Tesla Chair Robyn Denholm speaking with reporters about the merits of awarding Musk around $1 trillion worth of stock if the company achieves a series of ambitious market value and performance milestones.Tesla’s shares jumped 6.4% at 11:44 a.m. in New York, touching their highest price since Jan. 22. The stock is now up about 4% on a year-to-date basis, having recovered from a 45% decline as of early April..Read more:.Musk’s political moves shake Tesla as stock drops 45%.Musk, 54, last bought Tesla stock in the open market in February 2020, according to data compiled by Bloomberg. The chief executive officer offloaded more than $20 billion of the company’s shares in 2022, the year he acquired Twitter.The purchase amounts to a show of confidence in Tesla’s prospects after a challenging first half of the year in which vehicle sales slumped 13% worldwide. While Musk has talked up Tesla’s pursuit of robotaxis and humanoid robots, he’s also cautioned that the company could be in for “a few rough quarters” after the US phases out electric-car purchase incentives at the end of this month.It’s a bullish indicator for those who believe Tesla’s Optimus robots can be deployed in large numbers fairly soon, said Dmitry Shlyapnikov, an analyst at Horizon Investments who works with portfolio managers.“If you are a little more skeptical on Tesla’s robotics endeavours, this is simply Elon buying shares to indicate his commitment to the company so that the recently proposed pay package gets approved,” he said. Tesla’s car business has continued to show signs of strain, with market researcher Cox Automotive estimating that its share of the US electric vehicle market slipped below 40% in August. Registrations also kept slumping last month in major markets across Europe, and vehicle shipments from the company’s Shanghai factory dropped in both July and August.Meanwhile, Tesla’s price-to-earnings ratio — a metric that investors use to gauge how expensive a stock is — has soared as profit expectations sank. Tesla shares currently trade at about 186 times forward 12-month earnings, compared to the S&P 500’s average of 23 times. Even a group of the seven biggest US technology stocks — which include Tesla — trade at an average of 30 times.“There’s an increasing disconnect between the stock price and what we see as the earnings estimate trajectory,” said CFRA analyst Garrett Nelson. “A lot of investors are really taking a long-term view of the story and sort of continuing to give the company a pass on on some pretty major near-term headwinds.”Denholm, who’s been chair of Tesla’s board since 2018, called Musk a “generational leader” in a Sept. 12 interview with Bloomberg Television. She downplayed concerns that Musk’s political activity has hurt the company’s performance and suggested he has wide latitude in this regard going forward..© 2025 Bloomberg L.P.

Elon Musk buys $1bn in Tesla stock, boosting shares amid pay proposal

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