Tesla Stock Rises as Elon Musk Buys 2.5 Million Shares

Tesla co-founder and chief executive Elon Musk has purchased roughly $1bn (£735m) worth of Tesla stock, in a move interpreted by markets as a major vote of confidence in the electric car maker’s future.

The announcement, disclosed in a regulatory filing on Monday, revealed that Musk acquired about 2.5 million shares in the company on Friday. It marks his first open market stock purchase since 2020.

Shares of Tesla jumped more than 6% in early trading following the news, offering a rare boost for the company, which has struggled this year amid falling sales, increased competition, and the winding down of US tax incentives for electric vehicle buyers.

Building Control at Tesla

Musk already holds around a 13% stake in Tesla, but he has openly pushed for greater control of the company. In recent months, he demanded a 25% stake, at times threatening to quit if his request was not granted.

The Tesla board has been negotiating with Musk on compensation plans aimed at securing his long-term leadership. In June, it proposed a package worth up to $1 trillion, which would grant Musk as much as 12% of the firm’s shares if performance targets are met. The board also approved an interim award worth $29bn in stock last month, after a larger 2018 pay package was struck down in court.

Tesla chair Robyn Denholm told Bloomberg last week that Musk remained “front and centre” as chief executive, calling him “the right CEO for Tesla over this transformative period of time.”

Market Reaction

Financial analysts say Musk’s stock purchase was well received by investors. Danni Hewson, head of financial analysis at AJ Bell, noted that when company leaders buy into their own firms, it often reassures the market.

“Markets like it because it suggests they feel positive about the company’s future performance,” she said.

But Hewson added that Musk’s motivations may not be solely financial. “An inventive and ungenerous interpretation of Musk’s actions is he saw the news about Larry Ellison becoming the world’s richest man and decided to juice Tesla stock a bit to regain the title. Stranger things have happened.”

Political Tensions

Musk’s renewed investment in Tesla comes at a time of growing scrutiny of his political involvement. Once a vocal supporter of former US President Donald Trump during the 2024 election, Musk has since had a dramatic falling out with him. In Europe, his support for far-right causes has drawn criticism.

On Saturday, Musk appeared via video link at a rally in London organised by far-right activist Tommy Robinson. Addressing the crowds, he warned that violence was coming and that they must “fight back or die.”

The comments prompted condemnation from the British government, which accused Musk of using “dangerous and inflammatory language.”

Tesla’s board has acknowledged concerns about Musk’s political activities, saying its compensation packages are designed in part to ensure his focus returns to the company.

Tesla’s Challenges

Musk has urged investors to focus on the company’s long-term vision, particularly its push into robotaxis, artificial intelligence, and automation. However, Tesla is contending with slowing sales, intensifying competition in the EV sector, and reputational challenges linked to Musk’s outspoken political positions.

Despite these headwinds, his $1bn stock purchase has been interpreted as a signal of commitment to Tesla’s next chapter. For now, markets appear reassured, though questions remain about whether Musk can keep the company on track while balancing his increasingly controversial public profile.