rtmark
LearnBonds.com

Tesla’s Uber-Confident CEO Elon Musk Just Placed Huge Wager on Himself

Tesla Motors Inc (NASDAQ:TSLA) Elon Musk

Tesla Motors Inc CEO Elon Musk gave investors one more reason to feel encouraged just days before its Q4 and full-year earnings. Musk raised his personal stake in the EV firm by another $100m shares. Such a move can be viewed as a positive statement by Musk and one that could serve to buoy investor confidence.

Tesla Motors Inc (NASDAQ:TSLA) Elon Musk

Boosting investors’ confidence in Tesla

It must be noted that Musk did not buy the stock in open market, instead, he converted his 532,000 stock options, acquiring the stock at $6.63. This is a very good deal for Musk as Tesla shares are currently trading around $192.

With this purchase, Mush now holds around 22% in Tesla Motors Inc . Apart from Musk, other big holders are Fidelity Investments, which holds around 10% in the EV firm. The Mutual fund giant once held almost 15% stake in the firm, but lowered their stake in 2013.

Buying or selling of a stock by an insider provides a hint to the investors over the firms growth prospects. When executives believe a firm to do well, they buy the stock, and when they do not agree with the point of view, they sell. Therefore Musk’s latest move – its timing and the volume – will surely push up investors confidence in Tesla.

Musk’s transaction was revealed by the firm in a filing with the SEC on Friday. The EV firm will come up with its earnings report on Wednesday, February 10.

Musk’s intentions – hard to tell

Along with boosting investors confidence, the move may also fuel speculations as weeks before and after a firms earnings are generally seen as sensitive times, where executives lay low rather than making “making bold, brash moves or statements,” says a report from Mashable.

Even Regulation Fair Disclosure discourage public firms against talking “to analysts or investors during that time, lest they tip off anyone to the financial performance to come,” the report says.

Thus, a stock purchase, can raise questions that the CEO bought the stock as he or she was aware that the upcoming earnings report from the firm will be positive. On the other hand, it could also hint that the earnings are not as good, and the executives “wants to shore up confidence before rumors start circulating,” the report says.

Nevertheless, reading Musk’s intentions behind this move is something hard to tell. He is an avid believer in Tesla, and at the same time, he is a smart businessman, who knows how to make money.

Tesla’s stock is not very far from its lowest point of $186 share. On Friday, Tesla Motors Inc shares closed up 0.79% at $191.20. Year to date, the stock is down over 20% while in the last one-year, it is down over 6%. The stock has a 52-week high of $286.65.

All trading carries risk. Views expressed are those of the writers only. Past performance is no guarantee of future results. The opinions expressed in this Site do not constitute investment advice and independent financial advice should be sought where appropriate. This website is free for you to use but we may receive commission from the companies we feature on this site.
Avatar

Aman is MBA (Finance) with an experience on both marketing and Finance side. He has work as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, playing PC games and cricket.

X

Leading Social Trading Platform with 0% Commission

Leading Social Trading Platform with 0% Commission

Leading Social Trading Platform with 0% Commission

TRADE WITH ETORO

75% of investors lose money when trading CFDs.

Leading Social Trading Platform with 0% Commission
TRADE WITH ETORO

75% of investors lose money when trading CFDs.

HTML Snippets Powered By : XYZScripts.com