The price of Tesla (NAS100:TSLA) has seen a share price surge after founder Elon Musk showed confidence in his plans with a $1bn purchase of shares.
TSLA – Daily Chart
TSLA shares have been waiting for a break higher after finding support above the downtrend from the late 2024 highs. There is some support at the current level with the next obstacle being the $480 level.
Musk’s purchase was a rare move by a CEO who normally acquire stock at a big discount through options exercise. Tesla investors saw the action as a vote of confidence in the company and a further commitment that the founder will remain focused on Tesla.
“It’s a huge vote of confidence from Musk and the bulls love seeing this,” said Dan Ives, at Wedbush Securities.
“It sends a positive signal after a very tumultuous year for Musk and Tesla shareholders.” He added.
Ironically, Tesla’s price surge from the $1 billion purchase has now added more than $8 billion to Musk’s overall Tesla holdings. Tesla and other EV makers will now face the end of a $7,500 tax credit at the end of this month. While the credit is expected to lift third quarter vehicle sales, it could lead to a sharp drop for rest of the year.
The rally in Tesla follows a move higher last week after the company signed off on a new pay package for Musk. Both of the recent moves have suggested that his other business commitments will not be a distraction.
Elon Musk previously said that he would prefer to have control of 25% of the company.
“I am uncomfortable growing Tesla to be a leader in AI & robotics without having ~25% voting control. Enough to be influential, but not so much that I can’t be overturned,” Musk wrote back in January 2024. “Unless that is the case, I would prefer to build products outside of Tesla”.
His recent pay agreement and block purchase of shares could mean that he seeking to build a larger stake ahead of his belief in robotaxis and robotics.
