REUTERS/Stringer
- Elon Musk plowed $1 billion into Tesla shares on Friday, a filing revealed on Monday.
- The Tesla CEO raised his stake to 12.8%, well below the 25% voting control he demanded in 2024.
- Tesla has become so valuable that even Musk might struggle to buy his way to 25% control.
Elon Musk just spent $1 billion on Tesla shares. It’s only a small step toward tightening his grip on the EV maker.
Tesla’s CEO bought around 2.6 million shares of the EV maker on Friday, a regulatory filing revealed on Monday. The purchases increased his share count by just 0.6% to around 413 million shares, lifting his ownership stake from roughly 12.7% to 12.8%.
The 304 million shares from his 2018 compensation plan, which remain tied up in legal disputes, were not included in the filing. In calculating Musk’s stake, Business Insider excluded the 96 million restricted shares he was granted in August.
Musk said in January 2024 that he wanted at least 25% voting control of Tesla so he’d be “influential” but could still be “overturned.” He added that without that level of control, he “would prefer to build products outside of Tesla.”
Scooping up $1 billion of stock is a step in the right direction, but Tesla’s market value — $1.2 trillion at Friday’s close — means even a person of Musk’s means might struggle to buy his way to a 25% stake.
At that scale, buying $1 billion of stock only increased his Tesla stake by 0.08%. Purchasing another 12.2% of the company to reach 25% ownership would cost upward of $150 billion — before accounting for the fact that Musk buying huge amounts of stock, and having to disclose his expanding stake along the way, would likely push up Tesla’s stock price and thus his cost.
Musk is the world’s richest person, with a $419 billion net worth per the Bloomberg Billionaires Index. But Tesla stock already makes up a big chunk of that, as do illiquid shares in his other companies, such as SpaceX and xAI. As such, raising enough cash to buy another major chunk of Tesla could be tricky.
The cost and difficulty of boosting his Tesla ownership through buying on the open market may help explain why Musk is seeking an alternative path. Tesla’s board proposed last week a pay package that could award him $1 trillion of stock if he’s able to grow Tesla’s market value roughly eightfold and meet a raft of operational goals over the next decade.
It’s worth noting that Musk may have increased his Tesla stake not in the service of a power grab but because he wanted to signal his confidence in his company and put his money where his mouth is.
This was his first open-market purchase since 2020; whether more follow could provide further clues to his thinking.
Tesla didn’t immediately respond to a request for comment from Business Insider.
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