Elon Musk to Buy $20 Million in Tesla Stock
- By Holly LaFon
CEO of electric carmaker Tesla (TSLA) has notified the company's board that he will purchase $20 million of its shares.
Musk said he will buy the stock during the "next trading window" at its market price at that time. At Tesla's closing price of $271.78 Wednesday, $20 million would purchase roughly 73,589 shares. Tesla's stock price declined 1.74% for the day following the announcement.
Warning! GuruFocus has detected 5 Warning Signs with TSLA. Click here to check it out.
The intrinsic value of TSLA
The outspoken Tesla CEO owns approximately 33,737,921 shares of the company, giving him a 19.8% stake.
His ownership grew this year as he made several significant share purchases. Musk bought 72,500 shares on June 13, 33,000 shares on May 7 and 95,420 shares on March 17.
The announcement of his decision to invest still further in the company came in the same filing that detailed his settlement with the Securities and Exchange Commission and was described as as "separate and apart" from the settlement.
Musk became entangled with the SEC when he made several tweets earlier this year suggesting he had secured funding to take the company private. The SEC alleged that Musk never had viable sources of funding to make that announcement.
As part of the settlement, Tesla and Musk each will have to pay fines of $20 million, and Musk must resign as chairman of the board within 45 days of the filing of settling documents. The ruling will allow him to remain as the company's CEO and serve on its board of directors.
He will also have to be more careful with tweeting. The settlement requires the company to "further enhance controls with respect to Elon's public communications regarding Tesla and to pre-approve any such written communications that contain, or reasonably could contain, information material to Tesla or its stockholders."
Shares of Tesla are down 13.71% year to date.
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This article first appeared on GuruFocus.
Warning! GuruFocus has detected 5 Warning Signs with TSLA. Click here to check it out.
The intrinsic value of TSLA
